Hybrid

1.

Hybrid is a term used to describe a financial instrument which displays characteristics of both debt and equity.

Such instruments might be designed to be an intermediate (or mezzanine) category of capital between equity and debt, or to have some of the risk absorbing characteristics of equity and, ideally, the tax efficiency of debt.

These are 'hybrid' financial instruments.

2. Tax.

The term 'hybrid' can also refer to an entity which is treated differently for tax purposes in different tax jurisdictions.

3. Green finance - greener technology.

The use - in a single system - of both traditional and greener technologies.

For example, vehicles that can run either on electric batteries or more traditional fuels such as petrol or diesel.

4.

More broadly, any structure, instrument or entity with mixed, or intermediate, characteristics between two or more other, simpler or standardised structures.

Intra-day net settlement

"There are two basic ways that domestic clearing systems settle:

• end-of-period net settlement; and
• real-time gross settlement.

A third option is a hybrid of these two: intra-day net settlement. This is practised by a number of systems, such as the US Clearing House Inter-bank Payment System (CHIPS) and the Faster Payments Scheme in the UK."

Payments and payment systems - the Treasurer's Wiki.

Hybrid nature of ultra short duration bond funds (USBFs)

"USBFs are open-ended bond funds that occupy the investment space between MMFs and Short Duration Fixed Income Bond Funds. 'USBFs represent a strategy for many seasons, and aim to improve returns over MMFs for less liquid cash, without significantly increasing risk,' explains Andrew Dickinson, HSBC’s EMEA liquidity investment specialist.

USBFs provide investors with an interesting option. 'An investment manager has the flexibility to use both securities seen in either MMFs or Short Duration Bond Funds, but more importantly can implement interest rate and credit strategies that could closely match either of these fund types,' says Dickinson.

The hybrid nature of USBFs means they can frequently deliver superior returns to MMFs, over longer investment horizons, under different credit and interest-rate environments, including periods of stress in financial markets or when interest rates are increasing."

Ultra Short Duration Bond Funds: Seeking the right balance between risk and return - ACT Knowledge Hub.

The term 'hybrid' originates from horticulture and farming, where hybrid plants and animals are a biological cross between two different species or breeds.

See also

• Bond fund
• Cash
• Clearing House Interbank Payment System
• Convertible debt
• Electric vehicle
• EMEA
• Faster Payments Service
• Green finance
• Hybrid debt
• Hybrid capital
• Hybrid clearing and settlement systems
• Hybrid cloud
• Hybrid entity
• Hybrid mismatch arrangement
• Hybrid pension scheme
• Hybrid working
• Investment horizon
• Liquid
• Liquidity investment
• Mezzanine
• Money market fund (MMF)
• Open-ended
• Payments and payment systems
• Preference shares
• Settlement
• Short Duration Fixed Income Bond Fund = Short Duration Bond Fund
• Stress
• Ten Point Plan for a Green Industrial Revolution
• Ultra short duration bond fund
• Warrant

Other resource

• Ultra Short Duration Bond Funds: Seeking the right balance between risk and return - ACT Knowledge Hub