Hybrid funds the way forward amid soft macros and valuation reset: Vetri Subramaniam

Vetri Subramaniam, Chief Investment Officer at a leading asset management company, advocates hybrid funds as the optimal investment strategy amid macroeconomic uncertainties and valuation resets. He argues that the 40-60% equity allocation range in hybrid funds provides adequate market participation while cushioning against volatility. This perspective comes as Indian markets face global headwinds from prolonged high interest rates and geopolitical tensions. Hybrid funds have attracted ₹25,000 crore inflows in FY25 so far, outperforming pure equity categories. Subramaniam highlights their tax efficiency and rebalancing advantages in current market conditions where neither equity nor debt appears clearly attractive. His analysis suggests hybrid funds could deliver 12-14% annualized returns over the next three years, outperforming most fixed income products while reducing equity risk. This view is gaining traction among institutional investors reallocating portfolios after the recent market correction.