Hybrid Schemes fell out of flavour in FY20: Here’s why

Hybrid mutual funds are mutual fund schemes that invest in both equity and debt. They are meant to offer some of the benefits of equity with less risk than pure equity schemes. Taxation of some hybrid schemes as equity funds, lends an edge. In times of volatility, investors are supposed to turn towards these funds in preference to pure equity schemes. But this does not seem to have happened on the ground, as AMFI data shows. In this piece we look at why and what the case for them looks like.

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