Hybrid Mutual Funds Witness Surge in Inflows in May
Hybrid mutual funds in India saw a significant increase in net inflows in May, rising 46% to ₹20,765 crore, according to AMFI data. Investors are attracted to these funds due to their diversified portfolios, which include equity, debt, gold, and real estate.
Hybrid Mutual FundsAmfiDiversified PortfoliosNet InflowsMarket VolatilityReal Estate PuneJul 05, 2025
AMFI is an Indian trade association for all the asset management companies of SEBI-registered mutual funds in India. A recent statement from AMFI highlighted that the sharp increase in hybrid mutual funds comes against the backdrop of global events, particularly the Russia-Ukraine conflict and trade barriers by the US, leading to highly volatile market conditions.
"Investors chose hybrid mutual funds, which is a reflection of an increased inclination towards a diversified portfolio, since hybrid funds invest in a combination of equity, debt, gold, and other asset classes like real estate," the statement noted. The allocation between these assets varies depending on the type of hybrid fund. Since hybrid funds combine two or more asset classes in one portfolio, they tend to capture growth opportunities while cushioning the impact of market corrections.
The recent performance of hybrid funds clearly illustrates why investors are showing interest. Hybrid funds from Nippon India Mutual Fund have led the charts. The AMC's Balanced Advantage Fund has clocked in a 15.29% return over the last two years, while the Nippon India Multi Asset Allocation Fund gave a 23.16% return in the same period. In the same period, Kotak Hybrid Fund gave a return of 12.15%, ICICI Balanced Advantage Fund 15.76%, and SBI Conservative Hybrid Fund 23.82%.
Hybrid mutual funds tend to outperform broader indices since their portfolios are hedged, being a mix of assets, and the allocation is aptly divided between equity, debt, and other assets like gold and silver. The recent increase in the prices of gold has also aided the performance of hybrid mutual funds, as mentioned in the AMFI statement.
For investors looking to diversify their portfolios and hedge against market volatility, hybrid mutual funds offer a compelling option. These funds provide a balanced approach, combining the potential for growth with the stability of diversified investments.
Frequently Asked Questions
What are hybrid mutual funds?
Hybrid mutual funds are investment vehicles that allocate assets across different classes such as equity, debt, gold, and real estate. They aim to provide a balanced and diversified portfolio to investors.
Why are investors attracted to hybrid mutual funds?
Investors are attracted to hybrid mutual funds because they offer a diversified portfolio, which can help in capturing growth opportunities while cushioning the impact of market corrections.
What is AMFI and its role?
AMFI stands for the Association of Mutual Funds in India. It is a trade association for all SEBI-registered mutual fund companies in India, providing data and insights on the mutual fund industry.
How did hybrid mutual funds perform in May 2023?
In May 2023, hybrid mutual funds saw a significant increase in net inflows, jumping 46% to ₹20,765 crore, compared to ₹14,247 crore in April.
What factors contributed to the surge in hybrid mutual fund inflows?
The surge in hybrid mutual fund inflows can be attributed to global events such as the Russia-Ukraine conflict and trade barriers by the US, which led to volatile market conditions. Investors sought diversified portfolios to hedge against these uncertainties.
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