Many times individuals look for readymade solutions for their long term goals. Child insurance product is a case in point, wherein people buy them with a hope to build large corpus for their child’s education. Enough has been written about the sub-optimal performance of traditional plans that fail to cope up with rising inflation in the long term. Despite the limitations of over-reliance on a single product, many individuals want simple solutions to address their wealth goals. Since hybrid products offer exposure to both asset classes - equity and debt, they can be considered for meeting long term goals. Here is how one can look as these mutual fund offerings:
How the fixed allocation hybrids work These are first and oldest offerings in hybrid category - hybrid equity aggressive (also known as balanced funds), hybrid debt aggressive & hybrid debt conservative. The level of equity & debt investments varies in each of the option. While this differs from fund to fund, the hybrid equity aggressive funds carry highest equity exposure at approximately 70%. The hybrid equity aggressive funds offer taxation benefits like normal equity mutual funds. The hybrid debt aggressive & hybrid debt conservative category offer taxation benefits like a normal debt mutual fund. These funds are actively managed & rebalanced regularly. The focus on fixed asset allocation ensures automatic rebalancing which most people otherwise miss out.
