Invest in a variety of debt and equity instruments through hybrid funds. They invest in both equities and debt in an effort to strike a "balance" between income and growth.
The regular income from the debt instruments gives the returns on such funds more stability.
The portfolio's stock exposure will determine the fund's risk and return. The higher the allocation to equities, the bigger the risk.
Listed below are 100+ hybrid mutual funds by top Asset Management Companies (AMCs). You can filter these funds based on your risk appetite, AMC, returns, ratings and benchmark index.
Hybrid funds are a type of mutual funds that invest to create a balanced asset portfolio with investments across asset types in order to generate long term capital appreciation. They invest in a mix of asset classes, such as equity, debt, gold, commodities, international equities, and more. A hybrid fund typically holds securities in a diversified group of companies and instruments within a single plan for a medium to long term period in order to achieve their investment objectives.
Hybrid mutual funds plan seek to achieve a balance between risk control and maximum returns by investing in different combinations of different asset types. In this way, they can be considered safer than pure equity funds and riskier than debt funds, while also offering an easy way for new investors to maximize their returns while taking sensible precautions against market volatility.
The Scheme Information Document (SID) specifies the percentage of stock and debt that will be held in the portfolio.
Who should invest in hybrid funds?
Equity focused hybrid funds (also known as aggressive hybrid funds) are the best choice for investors seeking growth with some stability in their investments.
Conservative investors searching for a return boost with little exposure to equity might consider debt-oriented hybrid funds (conservative hybrid fund).
Hybrid funds are typically suited to two main kinds of investors:
1. Investors with a medium to long investment horizon:
Hybrid funds are best suited for those with an investment horizon of 3 to 5 years, as the funds invest in a mix of assets that can take time to generate stable capital appreciation.
2. First time or conservative investors:
These funds aim to balance risk with rewards by taking a moderately aggressive approach and sensible safety precautions in their investment strategy. This makes them a reasonable entry point for first time investors who aren’t sure of market complexities, and conservative investors who wish to limit their risk exposure.
What are the risks associated with hybrid funds?
Every investment possesses some degree of inherent risk. Hybrid funds seek to find a balanced risk approach by creating a diversified portfolio. As a result, they seek to capture the high capital appreciation aspects of equity funds with the security of debt funds, which makes them moderately risky. Since there is an element of risk inherent in hybrid mutual funds, investors are strongly advised to understand their exposure, the investment objective of the plan, and their own risk tolerance.
Hybrid funds also share some risks that are common across all mutual funds, such as:
1. Risk of total loss - Equity and related securities can potentially result in total loss of principal investments.
2. Price risk – Market conditions can result in daily price fluctuations.
3. Liquidity risk – Settlement periods can be unpredictably extended and the ability to sell can be restricted by overall trading volume of specific stocks in the portfolio. This limits the ability of the fund to sell held securities which can result in potential losses and fall in value of the scheme.
4. Event risk – Any unexpected or detrimental event impacting a company or industry in which the mutual fund is invested can result in a price risk.
How to pick the right fund/scheme?
Investing in the right hybrid fund scheme differs from person to person. It is based on various factors – the most important being the ability to bear risk and the willingness to take on the risk. Determining your own risk-profile is essential in picking the right fund/scheme. Other major factors include the financial goal and the time horizon for the investment. Here are some of the key factors to consider when selecting a hybrid fund right for your needs:
1. Investment strategy/objective: Every fund has a declared investment strategy and objective, that explains their approach to investment. Investors should understand the approach taken by these funds so they can decide if it matches with their personal preference.
2. Match goals: Your investment goals can vary from tax savings to long term capital appreciation. Knowing this can help you find funds that can support these goals.
3. Risk vs reward: Hybrid funds take higher risks for proportionately higher rewards. By analyzing the risks taken by the mutual fund, investors can discover if they match with their own personal risk profile and preferences.
4. Hybridity preference: Investors should know when they will need their investment corpus. Hybrid funds are designed for medium to long term returns, with a minimum period of one year for any results to materialize. If your hybridity requirements are shorter than that, consider investing in debt funds instead.
Our Partners
Our Partners
Frequently asked questions
How do hybrid funds work?
These funds try to balance risk and return, by investing in equity, derivatives, and debt. Derivatives reduce directional equity exposure. This reduces the volatility and generates a stable return.
How to find the best hybrid fund?
Hybrid funds are evaluated on the basis of consistency in return, fund management team, vintage, corpus, risk, return, and expense ratio. The best hybrid funds are those which consistently lie in the top 25% of their peer group over a period of time. However, it is important to see the risk that they have taken to achieve those returns. It is also important to look at the launch date to understand the period of existence and performance across the period.
What is the difference between hybrid fund and balanced fund?
Hybrid funds are funds that invest in a blend of more than one asset class. These could be debt/fixed deposit type of securities, equity, commodities (gold). Mostly hybrid funds invest in debt and equity in various proportions.
Balanced funds are just one type of hybrid funds. The name suggests balanced funds invest an equal amount in stocks and FD like instruments.
Is it safe to invest in hybrid funds?
Even though hybrid Funds are considered riskier than debt funds, they are safer than equity funds. They offer comparatively returns and lower risks.
Bajaj Finance Limited (“BFL”) is a Non-Banking Financial Company carrying the business of acceptance of deposits, providing lending solutions to Retail & Corporate customers, and is a Corporate agent of various insurance Companies. BFL is also registered with the Association of Mutual Funds in India (“AMFI”) as a distributor of third party Mutual Funds (shortly referred as ‘Mutual Funds’).
BFL does NOT:
(i) provide investment advisory services in any manner or form;
(iv) carry independent research or analysis, including on any Mutual Fund schemes or other investments; and provide any guarantee of return on investment.
In addition to displaying the Mutual fund products of Asset Management Companies, some general information is sourced from third parties, is also displayed on ‘As-is’ basis, which should NOT be construed as any solicitation or attempt to effect transactions in securities or the rendering any investment advice. Mutual Funds are subject to market risks, including loss of principal amount and Investor should read all Scheme /Offer related documents carefully. The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities. The NAV will inter-alia be exposed to Price / Interest Rate Risk and Credit Risk. Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the Mutual Fund. BFL shall not be responsible or liable for any loss or shortfall incurred by the investors. There may be other / better alternatives to the investment avenues displayed by BFL. Hence, the final investment decision shall at all times exclusively remain with the investor alone and BFL shall not be liable or responsible for any consequences thereof.
Bajaj Finserv Direct Limited, (“BFDL”), a wholly owned subsidiary of Bajaj Finserv Limited (is a Registered with SEBI as an Investment Advisor with Registration no. INA000016083). BFDL enables resident Indian customers to directly invest in third party mutual funds through its online platform. BFDL entered into a referral arrangement with BFL, whereunder, BFL may, without risk or responsibility on its part, refer the resident Indian customers who are interested in placing their investments in Direct Mutual Funds through BFDL online platform. Investment by a person residing outside the territorial jurisdiction of India is not acceptable nor permitted.
Disclaimer on Risk-O-Meter:
Investors are advised before investing to evaluate a scheme not only on the basis of the Product labeling (including the Riskometer) but also on other quantitative and qualitative factors such as performance, portfolio, fund managers, asset manager, etc. and shall also consult their financial advisers, if they are unsure about the suitability of the scheme before investing