HYBRID FUNDS

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What Is a Hybrid Fund ?

A hybrid fund is an investment fund that is characterized by diversification among two or more asset classes. These funds typically invest in a mix of stocks and bonds. They may also be known as asset allocation funds.

Hybrid funds offer investors a diversified portfolio. The term hybrid indicates that the fund strategy includes investment in multiple asset classes. In general it can also mean that the fund uses an alternative mixed management approach.

Key Takeaways


  • A hybrid fund is a classification of mutual fund or ETF that invests in different types of assets or asset classes to produce a diversified portfolio.

  • Balanced funds, which hold typically 60% stocks and 40% bonds are a common example of a hybrid fund.

  • Blended funds, which mix growth and value stocks, are another hybrid fund example.