Top Hybrid Funds

Hybrid Mutual Funds

Hybrid funds invest in debt and equity in varied proportions. Ideal for investors looking to earn high returns with equity and safeguard capital with debt.
Risk: Low To HighInvestment Horizon: Medium To Long Term
1Y return
SBI Magnum Children's Benefit Fund- Investment Plan Direct Growth
SBI Magnum Children's Benefit Fund- Investment Plan Direct Growth
24.18%
AUM ₹493 Cr Expense 1.2%
Bank of India Conservative Hybrid Fund Direct Growth
Bank of India Conservative Hybrid Fund Direct Growth
21.33%
AUM ₹54 Cr Expense 1.71%
ICICI Prudential Retirement Fund Pure Equity Plan Direct Growth
ICICI Prudential Retirement Fund Pure Equity Plan Direct Growth
19.99%
AUM ₹163 Cr Expense 1.12%
ICICI Prudential Multi-Asset Fund Direct Plan Growth
ICICI Prudential Multi-Asset Fund Direct Plan Growth
16.38%
AUM ₹13279 Cr Expense 1.19%
ICICI Prudential BHARAT 22 FOF Direct Growth
ICICI Prudential BHARAT 22 FOF Direct Growth
15.9%
AUM ₹63 Cr Expense 0.08%
ICICI Prudential Equity & Debt Fund Direct Plan Growth
ICICI Prudential Equity & Debt Fund Direct Plan Growth
14.97%
AUM ₹19096 Cr Expense 1.25%
HDFC Balanced Advantage Fund Direct Plan Growth Option
HDFC Balanced Advantage Fund Direct Plan Growth Option
9.6%
AUM ₹43836 Cr Expense 0.98%
SBI Retirement Benefit Fund - Aggressive Plan Direct Growth
SBI Retirement Benefit Fund - Aggressive Plan Direct Growth
9.04%
AUM ₹792 Cr Expense 1%
Franklin India Dynamic Asset Allocation Fund Of Funds Direct Growth
Franklin India Dynamic Asset Allocation Fund Of Funds Direct Growth
8.73%
AUM ₹1091 Cr Expense 0.22%
SBI Retirement Benefit Fund - Aggressive Hybrid Plan Direct Growth
SBI Retirement Benefit Fund - Aggressive Hybrid Plan Direct Growth
8.6%
AUM ₹650 Cr Expense 1.17%
Quant Absolute Fund Growth Option Direct Plan
Quant Absolute Fund Growth Option Direct Plan
8.59%
AUM ₹404 Cr Expense 0.56%
Sundaram Debt Oriented Hybrid Fund - Direct Plan - Growth Option
Sundaram Debt Oriented Hybrid Fund - Direct Plan - Growth Option
8.03%
AUM ₹32 Cr Expense 1.2%
Bank of India Balanced Advantage Direct Growth
Bank of India Balanced Advantage Direct Growth
7.83%
AUM ₹73 Cr Expense 1.82%
ICICI Prudential India Equity FOF Direct Growth
ICICI Prudential India Equity FOF Direct Growth
7.69%
AUM ₹51 Cr Expense 0.66%
Franklin India Multi - Asset Solution Fund Growth Plan Direct
Franklin India Multi - Asset Solution Fund Growth Plan Direct
7.66%
AUM ₹48 Cr Expense 0.19%
ICICI Prudential Asset Allocator Fund(FOF) Direct Plan Growth
ICICI Prudential Asset Allocator Fund(FOF) Direct Plan Growth
7%
AUM ₹15824 Cr Expense 0.07%
Quant Multi Asset Fund Growth Option Direct Plan
Quant Multi Asset Fund Growth Option Direct Plan
6.94%
AUM ₹306 Cr Expense 0.56%
Parag Parikh Conservative Hybrid Fund Direct Growth
Parag Parikh Conservative Hybrid Fund Direct Growth
6.89%
AUM ₹871 Cr Expense 0.31%
SBI Magnum Children's Benefit Fund Direct Growth
SBI Magnum Children's Benefit Fund Direct Growth
6.73%
AUM ₹85 Cr Expense 0.82%
Kotak Equity Savings Fund Direct Growth
Kotak Equity Savings Fund Direct Growth
6.53%
AUM ₹1890 Cr Expense 1.14%
 

What are Hybrid funds?

Hybrid funds or Hybrid Mutual funds are a combination of equity and debt mutual funds which invest in a diversified portfolio of both equity and debt securities. People who have a moderate risk appetite and are looking for a diversified portfolio should invest in hybrid funds rather than several individual securities.
To meet the risk profile of various investors, hybrid funds are further classified into equity-oriented hybrid and debt-oriented hybrid funds, depending on their exposure. If equity exposure is over 65%, then it is said to be an equity-oriented hybrid fund. If not, it is a debt-oriented fund.
Hybrid funds are ideal for investors looking for a combination of capital protection as well as wealth creation.

What are the features of a Hybrid Fund?

Types of Hybrid Fund

Hybrid funds can be categorised based upon equity-debt allocation:

Who should invest in Hybrid funds?

The potential investors can be classified into three categories:
• Diversified Investors
Investors who want to invest in a diversified portfolio and are looking to diversify their risk across multiple asset classes like equity, debt, gold, real estate, etc., can invest in hybrid funds involving multi-asset allocation.
• Wealth investor
Investors who want to create long-term wealth but do not have the risk appetite for an equity fund or aggressive fund can invest in a balanced fund. Also, a balance fund is ideal for all-weather investing.
• Conservative investor
In the case of a risk-averse investor, conservative hybrid funds are ideal. These investors enjoy stable returns from the debt, and due to sizable equity allocation, such investors also enjoy the growth aspect.
• Novice Investor
Due to an appropriate mix of debt and equity, these funds are ideal for novice investors who want to park their savings to generate sizable returns. The funds are managed by expert managers who have years of experience dealing with asset allocation. Therefore, the need for hectic market research and identifying stocks to invest in is not required.

What are things an investor should consider before investing in Hybrid Funds?

How to invest in Hybrid funds online?

STEP 1
Download the INDmoney App
STEP 2
Create your profile
STEP 3
Select any best hybrid fund from our catalogue
STEP 4
Choose between Starting a SIP or One time lumpsum
STEP 5
Complete the payment process

Taxability of Hybrid Funds

The income tax law has classified the mutual fund universe into 2 categories for the benefit of computing taxes:

• Equity Oriented Schemes - Fund having a minimum of 65% in equity or equity-oriented securities

• Other Schemes

1. Equity Oriented Schemes:
Equity-oriented hybrid funds have a higher proportion of equity, i.e., about 65% - 80%, and therefore they are classified as equity-oriented funds for tax. For taxation, equity schemes have the upper hand compared to the other schemes.

• Long Term Capital Gains: If the equity mutual funds are held for more than a year, they qualify for a long-term capital gains tax of 10 percent. Gains of up to ₹1 Lakh in a financial year are tax-free.

• Short Term Capital Gains: If these schemes are held for less than a year, gains are treated as short-term capital gains and are taxed at 15 percent.

2. Other Schemes:

• Long Term Capital Gains: Long-Term gains on units held for over 36 months are taxed at 20 percent after providing indexation.

• Short Term Capital Gains: Other schemes held for less than three years are treated as short-term capital gains and will be added to the income and taxed as per the income tax slab applicable to the investor.

How to evaluate the best hybrid mutual funds to invest in 2022?

• Track record:
If the fund has consistently outperformed its peers and the benchmark over a 3 year and 5-year horizon, it is an indication that the fund is well-managed. While past performance is no guarantee of the future returns, it is an important indicator about the track record of the fund, and helps in evaluation with respect to its peers.
• Management:
Management of the equity funds plays an important role in its performance. Hence, if you have confidence in the asset management company and they are doing an ideal job in necessitating growth, you can bank on this fund. Also, the reputation of the fund manager is an important factor to check.
• Expense ratio attached to the funds:
This is usually seen as a parameter against all kinds of funds. It is defined as the money undertaken by fund managers for maintenance, marketing, distribution and selling expenses, etc. The right fund will have a desirable expense ratio within the range of 0.5 to 2.5%, which is an ideal industry benchmark.
• Asset allocation:
One of the key things to look at is how diversified is your fund’s portfolio and where have they majorly invested in. Some funds focus on more large and mid caps while some focus on a particular sector like banking or infra and some more on debt instruments. Your risk and returns potential depends on the type of asset allocation you prefer.
• Asset Under Management:
Higher fund size is complicated to manage, and a smaller fund size lacks flexibility. The Asset under management should not be very high or very low. This allows the funds' manager to liquidate investment and navigate swiftly during turbulent times easily.

Outlook

Hybrid funds are a combination of equity and debt funds. Due to the combination of debt and equity, the overall portfolio is diversified, and therefore the volatility or the risk profile of the portfolio is reduced. Hybrid funds must be evaluated based on returns, Asset under management, expense ratio, and fund manager profile. Hybrid funds are ideal for investors since they cater to various investors' needs and vividness in risk profile. However, it is not a holy grail since the risk aspect is inevitable, given that it depends on stock markets. Hence, before making any investment, do your research and find the fit that matches your risk appetite.

Frequently Asked Questions

What are hybrid funds?

How to invest in hybrid funds online?

Are hybrid funds tax free?

Do hybrid funds pay dividends?

How to choose the best hybrid funds to invest ?

What are the risks involved in investing in hybrid funds?

How long should I remain invested in hybrid funds?

Where do hybrid funds invest my money?

How much money should I invest in hybrid funds?

What are the expected returns of hybrid funds?

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