ITI Hybrid Mutual Fund

ITI Hybrid Mutual Fund: Investment Objective

The Investment Objective of ITI Hybrid Mutual Fund schemes is to generate long-term capital appreciation by investing in a diversified portfolio of debt, equity and other market instruments. The fund aims to provide investors with capital appreciation and regular income. The fund will be managed to balance the risks associated with investing in equity and debt instruments.

Risks Involved in ITI Hybrid Mutual Fund

Before investing in these schemes, it is imperative to get familiar with the ITI Hybrid Mutual Fund risks. This will help to clarify any hindrances during the investment tenure.

1. Market Risk: As with any other type of mutual fund, hybrid mutual funds are exposed to market risk. In other words, if the stock market or bond market experiences a downturn, the fund's value could drop significantly.

2. Interest Rate Risk: Hybrid mutual funds are exposed to interest rate risk, which means that if interest rates rise, the fund's value could suffer. This is especially true if the fund contains a large number of bonds.

3. Liquidity Risk: Hybrid mutual funds are typically less liquid than other mutual funds. It may be challenging to sell the fund's holdings quickly if needed.

4. Credit Risk: Hybrid mutual funds can be exposed to credit risk if the fund holds bonds. The bond issuer may not be able to make their payments, and the value of the fund could suffer as a result.

Return Potential of ITI Hybrid Mutual Fund

Investors can determine the overall fund performance through the ITI Hybrid Mutual Fund returns. It usually depends on several factors, such as the current market conditions, the fund's performance in the past, and the fund manager's investment strategy. Generally speaking, hybrid funds offer greater returns than pure equity or debt but come with higher risks. As such, one should expect to see returns ranging from moderate to high, depending on the particular fund and its investment strategy.

Who Should Invest in ITI Hybrid Mutual Fund?

ITI Hybrid Mutual Fund schemes are a good choice for investors with moderate risk tolerance capabilities and looking for a balanced investment portfolio. Investors looking to diversify their portfolio and invest in equity and debt instruments should consider investing in ITI Hybrid Mutual Fund. It is suitable for long-term investors willing to invest for at least five years.

Things To Consider Before Investing in ITI Hybrid Mutual Fund

Before string your investment journey with ITI Hybrid Mutual Funds, consider the following things:

1. Investment Objectives: It is essential to understand the investment objectives of the Investment Trust of India Hybrid Mutual Fund before investing. The fund's objective should align with your own investment goals and risk tolerance.

2. Fund Manager: Research the fund manager's past performance to understand their expertise in managing hybrid mutual funds.

3. Fees and Expenses: Review the fund's fee structure, including annual management fees, operating expenses, and other charges associated with investing in the fund.

4. Investment Mix: Analyse the fund's asset allocation and investments in asset classes like equities, debt instruments, and alternative investments.

5. Taxation: Review the tax implications of investing in the fund. Different types of investments have specific tax treatments, and you should know the tax consequences of investing in the fund.
6. Risk: Assess the fund's risk profile to ensure it aligns with your risk tolerance. Hybrid mutual funds tend to be more volatile than pure equity or debt funds, so it is crucial to understand the risks associated with investing in the fund.

Additionally, it would help if you looked into the ITI Hybrid Mutual Fund NAV to decide on investment.

Tax on ITI Hybrid Mutual Fund Schemes

Tax on ITI Hybrid Mutual Fund is the same as any other. Investors need to pay Short Term Capital Gains Tax (STCG) at 15% and Long Term Capital Gains Tax (LTCG) at 10% (without indexation) on their profits. Also, an additional surcharge and cess may apply.