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The global hybrid funds market size is experiencing tremendous growth, and is expected to increase in the future as investors are growing their preference for safe balanced funds. Hybrid funds aim to achieve wealth appreciation in the long-run and generate income in the short-run via a balanced portfolio. The fund is allocated in varying proportions in equity and debt, on the basis of investment objectives of the fund. Moreover, hybrid funds focus to achieve a long-term appreciation of wealth and create short-term income through a diversified portfolio.
Rise in disposable income with growth in economies and individuals with lower risk investing in diversified portfolio are some of the factors that drive the market growth. However, several banks & wealth management firms with higher market share create highly competitive environment and stringent regulations toward fund management & investments in the financial industry, which hinder the market growth.
Conversely, growth in awareness regarding investments in developing countries to offer massive investment environment for hybrid funds and rise in preference for balanced funds across the globe are some factors expected to create lucrative opportunities for the market in upcoming years.
The global hybrid funds market trends are as follows:
Fund managing companies offer diversified proportions of fund portfolios to investors. More diversification allows lower risk, which attracts lower risk profile investors. For instance, in February 2002, the Tata Mutual Fund launched Tata Multi-Asset Opportunities Fund, a more diversified hybrid fund, which focuses on investing in traded commodity derivatives. In addition, the scheme invests extensively in asset groups of equity, commodity derivatives, and debt. Moreover, exchange-traded commodity derivatives enable investors to choose for other commodities such as metals, agricultural produce, industrial chemicals, and oil & natural gas.
As debt and government securities depend on interest rates, recent lower rates triggered, as the pandemic has affected many hybrid and debt funds’ performance. To tackle such lower interest rates, Groupama Asset Management, headquartered in Paris, launched its new bond fund, named G Fund Hybrid Corporate Bonds IC to counter low interest environment across the globe, which could help in attracting investors during COVID-19 outbreak. The G Fund-Hybrid Corporate Bonds fund chooses corporate bond issuers from Organization for Economic Co-operation and Development (OECD) countries with an investment grade ratings. Investments are structured to give investors a better alternative, including institutional, and multi-manager practitioners in the market.
Key benefits of the report:
Key Market Segments
Key Market Players