New Delhi, Jan. 31 -- Hybrid mutual funds are funds that invest in multiple asset classes. Their investments constitute a collection of equity, debt, gold and even real estate. This kind of planned diversification while investing helps in managing risk and returns. Hence, ensuring both growth potential and stability making the case for them as solid investment options for 2025.

It is crucial to note that these funds primarily follow three key principles of diversification, correlation and asset allocation. Hence, by combining assets with low correlation on a historical basis (for example equity and debt) they bring down the overall portfolio volatility and risk while making the most of each asset class's strengths.

Multi-asset allocatio...