The Role of Hybrid Funds in Today’s Volatile Markets
In the current environment, marked by elevated interest rates, sharp market corrections, and inconsistent market leadership, portfolio construction requires more balance than ever. The focus today is not just on returns, but on managing volatility and investor behaviour through structured allocation.
Hybrid funds are investment funds that combine multiple asset classes – primarily equity and debt (and sometimes gold) – within a single portfolio. The idea is simple: participate in growth while maintaining a level of stability, without relying entirely on one asset class.
They play a specific and strategic role, depending on their design:
- Aggressive Hybrid Funds maintain a high equity allocation (typically 65–80%), with the balance in debt. They participate meaningfully in market upside but do offer limited downside protection – making them suitable for long-term investors who can manage interim volatility.
- Balanced Advantage Funds follow a dynamic allocation strategy, increasing equity during market corrections and reducing it when valuations are high. In volatile conditions, this helps manage drawdowns and removes the need for investors to time the market.
- Multi-Asset Funds allocate across equity, debt, and gold. With gold showing resilience during global uncertainty, these funds have helped bring stability when equity markets faced pressure.
In volatile markets, the real risk is not just market movement – it is reacting to it emotionally. A well-balanced approach helps reduce both financial and emotional volatility.
(Contributed by Neeraj Singh, Relationship Manager, HNI Desk, Hum Fauji Initiatives)
👉 Want to make your portfolio more stable without compromising on growth? Connect with us to structure your existing or new investments the right way.
Negative returns don’t mean wrong investments
Your portfolio is showing R-E-D.
The first thought most investors have is – “Did I make a mistake?”
But here’s an uncomfortable truth about investing: The best of the investments can deliver negative returns temporarily.
Markets don’t move in straight lines. Interest rate changes, global events, elections, or even investor sentiment can push prices down even when the underlying investment remains strong. What falls in the short term is often price, not good quality.
The real risk begins when investors react emotionally:
• Stopping SIPs just when units are available for cheap
• Exiting long-term investments midway
• Changing plans because of short-term discomfort
Think of it this way – during corrections, your SIP quietly works harder, accumulating more of the same units at lower prices. Many strong long-term portfolios are built during phases that feel the most uncomfortable.
Before taking any decision, pause and reflect:
- Has the financial goal changed?
- Has the investment strategy or the quality of investment fundamentally weakened?
- Has the time horizon reduced?
If the answer is No, then the market is simply doing what markets always do – testing patience before rewarding discipline. Negative returns are not a verdict on your investment. They are often just a usual phase in the journey of compounding.
(Contributed by Abhilash Jha, Financial Planner, Team Sukhoi, Hum Fauji Initiatives)
👉 Feeling uncertain about your portfolio? Connect with your RM to review your strategy and stay on track with confidence.
What did our clients ask us in the last 7 days
Question – My son has taken foreign citizenship. I would like to gift him all my gold jewellery. How should I do this? Will he be allowed to take all abroad? What are the implication of this?
Our Reply –
If your son has acquired foreign citizenship and you wish to gift him your gold jewellery – the most appropriate way is to execute a formal gift deed in his favour.
The deed should clearly mention each jewellery item along with details such as weight, purity, and identifying features. It is also advisable to maintain supporting documents like purchase invoices, valuation certificates, and photographs, as these help establish a clear audit trail and avoid future complications.
From a tax perspective, gifts to immediate blood relatives are exempt from income tax in India; so there will be no tax liability for either you or your son. However, proper documentation remains essential to establish the source and legitimacy of the assets.
When your son plans to carry the jewellery abroad, customs regulations will apply. He should:
• Declare the jewellery as per the destination country’s rules
• Carry all supporting documents (gift deed, invoices, valuation reports)
• Be aware that limits and duties may vary depending on the country
Gifting is straightforward – but documentation and compliance are key, especially when assets are being moved internationally.
(Contributed by Team Sukhoi, Hum Fauji Initiatives)
👉 Have more money, investment or asset related questions for your relatives abroad? Ask our Global Investment desk for authentic replies and investment guidance.
