The Resilience of Hybrid Mutual Funds in Turbulent Markets

Hybrid mutual funds saw a significant decline in inflows during the 2024-25 fiscal year due to market turbulence, but still showed remarkable resilience.

The drawdown protection provided by the debt component of hybrid schemes allowed investors to stay invested without the stress of pure equity volatility.

The NAVs of hybrid funds typically experience lower drawdowns compared to equity funds, making them a preferred choice for investors seeking a more stable journey.

The number of investors in hybrid mutual funds increased significantly to 1.56 crore as of March 2025, a growth of over 33 lakh investors.

Hybrid funds have seen a 22% growth in assets under management to ₹8.83 lakh crore as of March 2025.

The number of New Fund Offers (NFOs) in FY25 declined to 12, compared to 21 in FY24.

Net inflows in FY25 were ₹1.19 lakh crore, a decline of ₹25 crore compared to FY24.

Hybrid funds are preferred by investors with a moderate or low-risk profile, seeking a balance between equity market volatility and fixed-income market stability.

The drawdown protection offered by hybrid schemes is a key reason for the preference of investors with a moderate or low-risk profile.

Despite market turbulence, the resilience of hybrid mutual funds is a testament to their ability to provide stable investment returns over the long term.