Lack of understanding, mis-selling keep investors away from hybrid funds

Experts say lack of investor understanding and cases of mis-selling have impacted sentiment

Asset allocation schemes, which diversify between equity and debt in the same fund, are yet to gain traction among mutual fund (MF) investors. Industry experts and advisors say lack of investor understanding and cases of mis-selling have impacted investor sentiments on asset allocation strategies.

According to data from Association of Mutual Funds in India (Amfi), asset allocation categories have seen net outflows of Rs 6,714 crore in the current financial year.

Experts say investors are yet to understand that these funds are not to be compared with equity schemes on performance, given the debt component within an asset allocation strategy.

"Hybrid fund categories