Baroda BNP Paribas Hybrid Mutual Funds

Investment Objective

This is an open ended fund in which the top ten of the holdings constitute 43.81% of the total fund value. The main aim of this fund is to generate returns and capital appreciation through investment in equity and equity-related securities and fixed income options. The fund employs a growth oriented style of investment and invests across multiple market capitalisations. The fund manager conducts an in-depth analysis of the market to select the stocks best suited for generating returns in line with other mutual fund schemes in its category. This scheme has no minimum lock-in period for investment.

Risks Involved in Baroda BNP Paribas Hybrid Mutual Funds

The Baroda BNP Paribas Hybrid  Mutual Fund is protected against the volatility of the market owing to their decent exposure to debt securities. At the same time, these funds are riskier than purely debt oriented funds. Because of the greater allocation to debt instruments, conservative debt hybrid funds have a moderate level of risk as compared to other schemes in this category. 

On the other hand, aggressive hybrid funds have a higher risk exposure due to the extensive investment in stocks. But they also have the potential to provide high risk-adjusted returns. To increase your returns, you can always invest in balanced advantage funds, in which your portfolio will align with the underlying movement of interest rates. If you want exposure to multiple asset categories, you might want to consider multi-asset allocation funds.

Who Should Invest in Baroda BNP Paribas Hybrid Mutual Funds

Balanced mutual funds offer a healthy balance of stock options along with the cushion of debt instruments. In certain cases, the investor may also seek exposure to the money and gold market. These schemes may be best suited for investors who want to stay invested for a minimum period of five years. This holds especially true for mid cap stocks and long duration bonds where having a long investment horizon can help you achieve the fund’s true potential. Further, a comparatively stable asset allocation offers a combination of safety, wealth creation, and income. 

Retirees who have a moderate appetite for risk should consider investing in balanced funds to gain inflation-negating returns and provide security to their retirement corpus. Long term investors falling in higher tax brackets can allot a part of their portfolio to balanced funds with an equity component of at least 65%. This may also lower their tax liability as long term capital gains up to an amount of Rs. 1 lakh are exempt from taxation and any gains exceeding this limit will be taxed at 10%. 

Things To Consider Before Investing in Baroda BNP Paribas Hybrid Mutual Funds 

Before you make your final investment decision about Baroda BNP Paribas Hybrid Mutual Fund, you need to have a detailed understanding of the underlying investment. You should study the instruments in which the fund has invested and determine if they are in line with your appetite for risk and investment objectives. A balanced fund which is more inclined towards long duration bonds and mid cap tools might be a riskier investment for those seeking to tread lightly.

If you wish to save capital over a longer period of time, then you might want to consider investing in a balanced fund which invests in large cap stocks and high rated bonds. Further, you may want to compare schemes on the basis of returns so that you can choose a fund that can generate consistent returns.