Hybrid Mutual Funds Scheme made a comeback in the financial year 2023-24. As per the data of the Association of Mutual Funds in India (AMFI), it has garnered Rs 1.45 lakh crore in investments due to substantial inflows into the arbitrage category compared to an outflow of Rs 18,813 crore in FY23.
The increase in assets was due to an increase in the number of investors. The number of investors in this segment reached 1.35 crore in March 2024, which was 1.21 crore a year before, marking an inclination of the investors towards hybrid funds. These are the mutual fund schemes that invest in a combination of equity and debt securities along with gold and other assets. Due to investing in multiple asset classes simultaneously, they are considered low-risk balanced funds.
This category has been attracting regular investments since the change in taxation for debt funds at the onset of the financial year 2023-24 in April. Earlier, this segment had seen a net withdrawal of Rs 12,372 crore in March. In the influx of Rs 1.45 lakh crore, a massive amount of Rs 90,846 crore inflow was seen in the arbitrage category followed by Rs 33,000 crore in multi-asset allocation, Rs 10,765 crore in balanced advantage fund and Rs 10,327 crore in equity saving fund.
The increased inflow can be due to the anticipation of a reversal in the interest rate hike cycle in FY24 which led market participants to allocate funds to capitalise on higher rates while continuing the investment in equities, real estate and gold, said Gopal Kavalireddi, Vice President – Research at FYERS as quoted in Zee Business report. The equity-oriented category has seen an investment of Rs 1.84 lakh crore in FY24. It marked a 25.4 per cent increase in this category.
Siddharth Khemka, Retail Research Head, Motilal Oswal Financial Services Limited, said that this week, along with global indicators, the quarterly results of the companies will be monitored. He said that investors will also keep an eye on US manufacturing and service PMI data, US first-quarter GDP and Japan’s monetary policy.
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