New mutual fund investors prefer equity-oriented hybrid schemes (popularly known as balanced schemes) to pure equity schemes, say financial planners. Equity-oriented balanced schemes have given better returns than largecap schemes," says Abhishek Gupta, founder and chief financial planner, Moat Wealth Advisors. Investors are too scared of equity market crashes like the one in 2008, adds Mudgil.In fact, investment experts have been recommending equity-oriented hybrid schemes for the same reason to new investors for a long time. Gupta says investors like the idea that they are getting more returns from a low-risk option.Some mutual fund distributors often push investors to invest a lumpsum in hybrid schemes reasoning that staggering rules apply only to pure equity funds. Since equity-oriented hybrid schemes invest 65 per cent of the corpus in equity, they are not free from the vagaries of the market.

Source: Economic Times January 18, 2017 09:37 UTC