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Do any funds invest in both stocks and bonds?

I invest in both debt funds and equity funds. Are there any funds that invest in both equity and debt instruments?

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2 Approved Answers

Devanshu

There are various categories of mutual funds in India:

If you are looking for funds that invest in both bonds and in stocks you should look at Hybrid mutual funds. All mutual funds keep a mix of debt and equity in their portfolio depending on the fund type. For example, an equity fund may invest 80%-85% of its portfolio in equity and the remaining part in debt and similarly debt funds may invest 80%-85% in bonds and remaining part in equity.

But hybrid funds are funds which invest a considerable proportion in both debt and equity. The hybrid funds also known as the balanced funds, in general maintain allocation of more than 65% of the NAV in equity shares. This helps them to maintain tax status as equity oriented funds with incidental tax benefits to investors.

 The objective of these funds is to achieve growth by investing in equity and equity related investments, balanced with income generation by investing in debt and money market instruments.

 These funds are for people who are willing to take moderate risk, duration of investment is 2-4 years and want to benefit from both equity and debt. Returns in these funds are usually between 12-15%.

All big mutual fund houses have hybrid funds, you can check the details of the funds by clicking here

Some of the top performing balanced funds as per Groww rating are:

Arpit Chandak

Yes, balanced mutual funds are the funds which invest in both stocks and bonds. They are designed by the fund managers to handle the risk diversification of investors. These funds are also called hybrid funds.

  • The portfolio of most of these funds typically comprises of at least 65 % of the equity funds and the rest of the funds are invested in the debt funds to minimize the risk.
  • The equity component of the portfolio gives the investor the opportunity for growth whereas the debt component balances the risk of the investment.
  • Balanced funds are designed to handle the diversification of a risk averse investor. These funds provide benefits of both equity and debt funds by investing in a single fund.
  • They are developed by the fund managers to deliver the inflation beating returns and at the same time keeping risk in check.
  • To minimize the risk exposure, you can invest in balanced funds through Systematic Investment Plan (SIP). It will reduce the risk of whole portfolio and can provide investors the benefits of compounding.
  • The investment period of these funds should be extended to at least 2-3 years, to maximize the returns.

Top performing balanced funds:

Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.
Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, investment goal, time frame, risk and reward balance and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs.
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