Luck of mutual fund investors will shine! SEBI’s new rules will create a stir in hybrid funds

If you also invest in mutual funds and are afraid of market fluctuations, then market regulator SEBI has brought a great gift for you. Securities and Exchange Board of India i.e. SEBI is soon preparing to make major changes in the category of Hybrid Mutual Funds. With this new step, asset management companies (AMCs) will be able to launch schemes in the market with a completely new look and asset allocation, which will provide investors with a better balance between equity and debt. Why was there a need for new rules in hybrid funds? At present, the rules for hybrid funds present in the market are quite limited, due to which fund managers face some difficulty in changing assets according to the changing market conditions. The main objective of SEBI is to minimize the risks of investors and maximize their returns. After the introduction of new rules, the flexibility of hybrid funds will increase significantly. According to Reporter sources, under the new framework, fund houses will get the freedom to design schemes that shift to debt (fixed income) when the market crashes and take full advantage of equity (shares) when the market booms. How will the new schemes change the way of investing? After this decision of SEBI, the country’s top fund houses like SBI Mutual Fund, ICICI Prudential and HDFC Mutual Fund are going to join the race to introduce new hybrid schemes. Dynamic asset allocation will be made smarter in these upcoming schemes. This will directly benefit investors with moderate risk appetite who want higher returns from fixed deposits (FD) but do not want to take as much risk as pure equity funds. This new change will provide a safer and more balanced option to Indian domestic investors. What will be the direct benefit to investors? Experts believe that with the advent of these new hybrid schemes, investors’ portfolios will automatically get rebalanced, which will also reduce tax liability. When you get the right mix of equity and debt in a single fund, your money will remain safe even during major market downturns. If you are a retail investor from big cities like Lucknow, Delhi-NCR or Mumbai to Tier-2 and Tier-3 cities, this new category can prove to be a gamechanger in meeting your long term financial goals. As soon as SEBI gives its final approval to this decision, a flood of new schemes is expected in the market.