Zap Away Market Volatility With Hybrid Funds

Abhinav Mehta, Director, Capital Baazaar When the equity market is going up, having an all-equity or a majority-equity portfolio can be thrilling. In contrast, when the equity market becomes volatile or starts falling, then such a portfolio can give you sleepless nights and become the source of all your woes. Let’s see if the alternative is any better. Imagine you had an all-debt or majority-debt portfolio. During volatile or falling markets, you would be happy about all the losses that you avoided. However, when markets are moving up, you would lament missing out on big gains. In either situation, it would seem like a ‘heads you win and tails I lose’ kind of situation. Strike A Balance It is often said that too much of a good thing can be bad. So, instead of having an all-equity or all-debt portfolio, wouldn’t it be better to have a portfolio that has both...