Why Hybrid Funds Are Smart Choice for Women Investors? 

If you’ve ever had a similar conversation with a friend or thought about investing, you’re not alone. Many women feel unsure about where to start, especially when it comes to balancing safety and growth. That’s where hybrid mutual funds come into play! Let’s break it down step by step and see why hybrid funds for women can be a smart choice. 

What Are Hybrid Mutual Funds?

Hybrid mutual funds are a type of mutual fund that combines both equity (stocks) and debt (bonds) in one portfolio. This mix gives you a balance of high growth potential (from equity) and stability (from debt). 

For example, if a hybrid fund invests 60% in equity and 40% in debt, you get exposure to the stock market’s growth opportunities while still having some security from the debt portion. 

Why Hybrid Funds Are Perfect for Women? 

Women often have multiple financial goals to manage: saving for emergencies, children’s education, buying a home, or planning for retirement. Hybrid funds for women fit well with these goals as they offer a mix of stability and growth. 

1. Simplified Investment for Beginners

Investing can be overwhelming. Hybrid mutual funds take the guesswork out by giving you a pre-mixed portfolio of equity and debt. You don’t have to pick individual stocks or bonds – professionals do it for you. 

2. Balance Between Risk and Reward 

Women want stability in their investments. Hybrid funds investment offers a middle path—less risky than equity funds but with better returns than fixed deposits. 

3. Tailored for Life’s Milestones 

From building your emergency fund to building your financial security, hybrid mutual funds can support both short-term and long-term goals. For example: 

● Short-term goal (1-3 years): Create an emergency fund 

● Long-term goal (3+ years): Create wealth  and add it as a part of diversification in your long-term portfolio

Types of Hybrid Mutual Funds 

There is no one-size-fits-all in hybrid funds. Here are some best hybrid funds options that could suit your needs: 

1. Equity-Oriented Hybrid Funds: Focus on growth by investing more in equity (65% or more). 

2. Debt-Oriented Hybrid Funds: Safety-focused by investing more in debt (65% or more). 

3. Balanced Advantage Funds (BAFs): Dynamically adjust between equity and debt based on market conditions. 

4. Arbitrage Funds: Make use of price differences in different markets for the same asset to generate steady returns. 

You can check out Lxme’s Emergency Fund which consists of well-researched arbitrage funds.

Taxation of Hybrid Mutual Funds 

The taxation rules of hybrid mutual funds are based on their equity exposure: 

● Equity Exposure Above 65%: Treated like equity funds. Short-term gains (less than 1 year) are taxed at 20%, and long-term gains (over 1 year) at 12.5% if they exceed ₹1.25 lakh. 

● Equity Exposure Below 35%:Treated like debt funds. Taxes are applied according to your income tax slab, regardless of the holding period. 

● Equity Exposure Between 35%-65%: Short-term gains (less than 2 years) are taxed at 20%, and long-term gains (over 2 years) at Flat 12.5% on gains. 

Knowing the fund’s equity mix helps you plan better for taxes.

Why Lxme Recommends Hybrid Funds for Women? 

At Lxme, we believe women should be in control of their money. Hybrid funds for women are the simplest way to start investing. Whether you are creating your emergency fund or wealth for yourself, hybrid mutual funds can help you achieve your goals. 

You can check out Lxme’s Emergency Fund & My Wealth Plans which consists of well-researched and expert-curated hybrid funds that are best suited for women investors. 

A Real-Life Example 

Meet Neha, a 30-year-old professional, who’s planning for her emergency fund while keeping her investments safe and growing. Neha decided to invest in the Lxme Emergency Fund, which consists arbitrage fund a type of hybrid mutual fund that offers tax-efficient growth, stability, and easy access to her money. 

By investing in an arbitrage fund, Neha took advantage of price differences in different markets, generating steady returns with lower risk. The fund’s tax efficiency helped her plan her taxes, while the mix of stability and growth gave her peace of mind. 

Diversify Your Investments: Don’t put all your eggs in one basket. Consider diversifying across different asset classes to spread risk and boost returns. Hybrid mutual funds are a great start, but mixing them with other types of investments can help you reach your financial goals even better. 

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