New to investing? Check out these top 5 hybrid mutual fund picks

Top hybrid mutual funds: Considering mutual funds for your first investment? Financial experts suggest that hybrid funds could be the ideal choice for beginners who prefer not to handle their own asset allocations. These funds blend investments in both stocks and bonds, providing a balanced approach to investing while potentially offering higher returns.

Here are the top 5 hybrid mutual fund schemes currently performing well:

Quant Multi Asset Fund Direct Growth

This fund has delivered annualised returns of 25.77 per cent over the past three years and 30.53 per cent over the past five years, according to the data from Groww. The minimum investment amount is Rs 5,000 for lump sum and Rs 1,000 for SIP.

ICICI Prudential Equity & Debt Fund Direct Growth

With annualised returns of 25.12 per cent over three years and 21.85 per cent over five years, this fund is another strong performer. The minimum investment required is Rs 5,000 for lump sum and Rs 100 for SIP.

HDFC Balanced Advantage Fund Direct Plan Growth

Offering annualised returns of 24.98 per cent over three years and 19.69 per cent over five years, this fund provides a balanced advantage. The minimum investment amount is Rs 100 for lump sum and SIP.

Quant Absolute Fund Direct Growth

This fund has shown annualised returns of 21.85 per cent over three years and 26.62 per cent over five years. The minimum investment amount is Rs 5,000 for lump sum and Rs 1,000 for SIP.

Edelweiss Aggressive Hybrid Fund Direct Growth

With annualised returns of 21.49 per cent over three years and 20.09 per cent over five years, this fund offers aggressive growth potential. The minimum investment required is Rs 100 for lump sum and SIP.

Risk factors in hybrid fund investments

These funds are suitable for investors looking for a mix of stability from debt investments and growth opportunities from equity, although they do carry some level of market volatility.

When selecting the best hybrid mutual funds to invest in for 2024, it's crucial to consider certain risks. Hybrid funds, which include exposure to both stocks and bonds, are susceptible to market fluctuations due to their equity component.

This means that if stock prices decline, the fund's value may also decrease. Additionally, changes in interest rates can impact bond prices inversely, potentially leading to a reduction in the fund's overall value.

Moreover, investing in debt instruments with lower credit ratings increases the risk of default.  If issuers fail to repay interest or principal amounts, it can significantly impact the fund's performance.