HDFC Multiple Yield Fund will invest predominantly in fixed income securities and partially in equities and to that extent it is suitable for investors with a limited risk appetite.
Typically, such investors prefer a semblance of predictability in their returns and HDFC Multiple Yield Fund offers them that option. However, there is a rider to it - investors would have to be invested in the fund through a period of approximately one year (i.e. the maturity of the bond).
This is because in the interim period, the fund could witness above-average volatility in its debt component particularly in the present scenario when the fear of rising inflation and harder interest rates looms large.
The fund falls in the MIP (hybrid) category given its portfolio strategy to invest largely in fixed income securities and partly in equities.
However, the only difference is that the degree of predictability is higher given that HDFCMY will invest its debt portion in one paper that it will hold till maturity and its equity investments will be made in 'primarily in moderate to high dividend yield stocks'.