Hybrid mutual funds returned to net inflows in October 2026, attracting ₹3,514.06 crore, compared with net outflows of ₹456.68 crore in September, according to the latest data released by the Association of Mutual Funds in India (AMFI).
The turnaround was largely driven by arbitrage funds, which recorded net inflows of ₹3,928.89 crore in October, reversing net outflows of ₹3,956.38 crore in September.
However, the improvement in overall hybrid fund flows was not broad-based.
While arbitrage, multi-asset allocation and aggressive hybrid funds attracted investments, balanced advantage and equity savings funds continued to see net outflows.
Which hybrid fund categories attracted investor money?
Multi-asset allocation funds recorded net inflows of ₹1,514.66 crore in October, although collections declined from ₹3,666.98 crore in September.
Aggressive hybrid funds also remained in positive territory, with net inflows of ₹354.77 crore, compared with ₹1,863.54 crore in the previous month.
On the other hand, balanced advantage funds witnessed net outflows of ₹853 crore, while equity savings funds saw outflows of ₹1,133 crore.
The category-wise trends indicate that the positive overall flows were largely supported by arbitrage funds, while investor allocations across other hybrid categories remained mixed.
What are experts saying?
Hemant Kumar, Chief Business Officer, Tata Asset Management, said hybrid funds attracted around ₹3,500 crore in October, led by arbitrage and multi-asset allocation funds.
“The continued interest in these strategies are noteworthy, with investors increasingly looking at asset allocation and diversification across equity, fixed income and commodities rather than taking single-asset exposure,” he said.
What are hybrid mutual funds and how do their categories differ?
Hybrid mutual funds invest across multiple asset classes, primarily equity and debt. Depending on the scheme category, they may also invest in other asset classes, including gold and silver.
However, the asset allocation and investment strategies differ across categories.
- Arbitrage funds: These funds seek to benefit from price differences between the cash and derivatives markets. They typically maintain hedged equity positions, and their returns depend on available arbitrage opportunities and market conditions.
- Multi-asset allocation funds: These schemes invest in at least three asset classes, with a minimum allocation of 10% to each. The allocation can include equity, debt, gold and other permitted asset classes.
- Aggressive hybrid funds: These schemes invest 65-80% of their assets in equity and equity-related instruments, with the remaining 20-35% in debt instruments.
- Balanced advantage funds: Also known as dynamic asset allocation funds, these schemes dynamically manage their allocation between equity and debt according to their investment strategy.
- Equity savings funds: These schemes invest in equity, debt and arbitrage positions, combining unhedged equity exposure with hedged equity and debt investments.
- Conservative hybrid funds: These schemes invest 75-90% of their assets in debt instruments and 10-25% in equity and equity-related instruments.
What should investors consider before investing?
The October data shows that hybrid fund categories can experience very different investment trends because their underlying strategies and asset allocations vary.
Investors should not interpret higher monthly inflows as an indication of better returns or lower risk. For instance, arbitrage funds and aggressive hybrid funds have substantially different investment strategies and risk profiles.
Before investing, individuals should assess a scheme’s asset allocation, investment objective, riskometer, taxation and suitability for their financial goals and investment horizon.
NOTE TO READERS
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions.
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