Hybrid funds – Reap benefits
of Equity and Debt together

Create a balanced portfolio by investing in India’s top-rated hybrid funds – a perfect combination of equity stocks and fixed income bonds and debentures.

  • High capital growth
    Via equity stocks
  • Portfolio stability
    Investment in debt securities
  • Self-rebalancing
    Protects from market volatility

Invest in Hybrid Funds @ zero commission

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Hybrid Funds

What is Hybrid Mutual Funds?

Hybrid mutual funds combine equity and debt asset classes under one scheme helping investors benefit from capital appreciation of equities and stability provided by fixed income instruments. Hybrid funds are ideal for beginners with medium to long-term investment horizon. They also reduce the risk associated with single-asset class investing and can potentially provide higher returns than debt funds.

How do Hybrid Mutual Funds work?

  • The fund manager decides which asset classes should be included in the portfolio and how much should be allocated toward each class as per market conditions. This allows investors to benefit from the expertise of a fund manager and tailor their investments accordingly.
  • The fund also typically re-balances the portfolio periodically to adjust for market conditions. By investing in hybrid mutual funds, investors can benefit from the advantages of both equity and debt instruments. Hybrid funds provide investors with a more balanced portfolio because the sources of risk and factors influencing returns for investment options within an asset class are similar.

Top 10 Performing Hybrid Mutual Funds

Earn 1% more in Mutual Funds
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JM Aggressive Hybrid Fund - Direct (G)
Aggressive Hybrid Fund
NAV
140.23
Min. SIP Amt
₹ 100
Value Research
Stars
1 Y Return
55.25
3 Y Return
100.25
5 Y Return
225.27
ICICI Pru Equity & Debt Fund - Direct (G)
Aggressive Hybrid Fund
NAV
405.64
Min. SIP Amt
₹ 100
Value Research
Stars
1 Y Return
38.02
3 Y Return
95.84
5 Y Return
181.31
JM Aggressive Hybrid Fund - (G)
Aggressive Hybrid Fund
NAV
124.76
Min. SIP Amt
₹ 100
Value Research
Stars
1 Y Return
52.71
3 Y Return
93.22
5 Y Return
208.81
ICICI Pru Equity & Debt Fund - (G)
Aggressive Hybrid Fund
NAV
367.76
Min. SIP Amt
₹ 100
Value Research
Stars
1 Y Return
37.20
3 Y Return
92.57
5 Y Return
173.86
Edelweiss Aggressive Hybrid Fund - Direct (G)
Aggressive Hybrid Fund
NAV
68.30
Min. SIP Amt
₹ 100
Value Research
Stars
1 Y Return
34.66
3 Y Return
79.11
5 Y Return
162.12
Bank of India Mid & Small Cap Equity & Debt Fund-Dir (G)
Aggressive Hybrid Fund
NAV
41.19
Min. SIP Amt
₹ 1000
Value Research
Stars
1 Y Return
49.65
3 Y Return
77.52
5 Y Return
252.87
Quant Absolute Fund - Direct (G)
Aggressive Hybrid Fund
NAV
472.83
Min. SIP Amt
₹ 1000
Value Research
Stars
1 Y Return
38.31
3 Y Return
75.11
5 Y Return
235.96
Mahindra Manulife Aggressive Hybrid Fund-Dir (G)
Aggressive Hybrid Fund
NAV
28.46
Min. SIP Amt
₹ 500
Value Research
Stars
1 Y Return
35.73
3 Y Return
74.86
5 Y Return
183.01
Bank of India Mid & Small Cap Equity & Debt Fund (G)
Aggressive Hybrid Fund
NAV
38.27
Min. SIP Amt
₹ 1000
Value Research
Stars
1 Y Return
47.96
3 Y Return
72.27
5 Y Return
236.67
UTI-Aggressive Hybrid Fund - Direct (G)
Aggressive Hybrid Fund
NAV
416.77
Min. SIP Amt
₹ 500
Value Research
Stars
1 Y Return
33.33
3 Y Return
70.11
5 Y Return
144.00
*These are based on historical performance and are not recommendations. Investors should access their financial goals, risk appetite, and time horizon before investing.

Types of Hybrid Mutual Funds

  • Aggressive Hybrid Fund

    Aggressive Hybrid Fund
  • Equity Savings Fund

    Minimum 65% in equity, 10% in debt, and balance in Derivatives for hedging
  • Conservative Hybrid Fund

    10-25% in equity and 75-90% in debt
  • Dynamic Asset Allocation or Balanced Advantage Fund

    Dynamically shifts from 100% equity to 100% debt as per market conditions.
  • Multi-Asset Allocation Fund

    Must investment in at least 3 asset classes (equity, debt, gold, or commodities) with minimum 10% in each
  • Balanced Hybrid Fund

    40-60% in equity and balance 40-60% in debt
  • Arbitrage Fund

    Takes advantage of arbitrage opportunities with minimum 65% in equity.

Who should invest in Hybrid Mutual Funds?

Hybrid mutual funds provide investors with a diversified portfolio so that they can benefit from both equity and debt instruments.

  • Investors seeking a balanced portfolio can benefit from the returns of equity and stability of debt instruments.
  • Investors looking for moderate risk and return can look at investing in Hybrid mutual funds over pure equity funds. It’s an attractive option for investors with medium to high risk profile.
  • Medium to long-term investment horizon reduces the risk of hybrid mutual funds and investors can benefit from the power of compounding.
  • Suitable for New Investors or those who want to start investing but do not have much experience with stock markets as it reduces the complexity involved and allows investors to take advantage of the expertise of a fund manager.
  • Retirees, especially those who retired early, can also benefit from a steady stream of income and the potential for capital appreciation over time with hybrid mutual funds without taking too much risk.

Taxation of Hybrid Mutual Funds

Hybrid mutual funds are subject to taxation depending on the type of securities and allocation of the fund.

Type of hybrid funds Long-term capital gains Short-term capital gains
Equity-oriented hybrid funds (more than 60% allocation to equity) Capital gains arising from investments held for more than one year are taxed at 10% (if gains exceed ₹1 lakh in a financial year) and are tax-free (if gains are less than ₹1 lakh in a financial year) If units of hybrid mutual funds are sold within a year, then Short Term Capital Gains Tax of 15% will be applicable.
Debt-oriented Hybrid funds Debt-oriented hybrid funds are taxed at 20% after indexation if held for more than 3 years. Short Term Capital Gains are taxed as per applicable income tax slab if units are sold within 3 years.

FAQs on Hybrid Mutual Funds

The risk involved in hybrid mutual funds is lower than pure equity funds and therefore hybrid funds are considered relatively safe investments.

Investing in hybrid or pure equity mutual funds will depend on the investor’s risk appetite and investment goals. Equity mutual funds provide higher returns over a longer-term period. However, they come with a higher level of risk. Hybrid Mutual Funds are more suitable for investors looking for moderate levels of risk and return.

Yes, Hybrid Mutual Funds are suitable for long-term investments. This is because over a longer term, the risk of Hybrid Funds balances out and investors benefit from the compounding effect as well as capital appreciation

Hybrid mutual funds are an attractive option for investors looking to diversify their portfolio and benefit from returns generated by both equity and debt instruments. They carry moderate level of risk and generate moderate returns, making them suitable for investors with medium term goals or those who have just started investing in the stock markets. Moreover, they offer tax benefits depending on the type of securities and instruments held by the fund.

There are two main types of Hybrid mutual funds: Equity-oriented Hybrid funds and Debt-oriented Hybrid funds. Equity-oriented Hybrid funds invest a majority of their corpus in equity instruments, while debt-oriented hybrid funds invest primarily in debt instruments. Amongst these main types, there are 7 different types of hybrid funds – Aggressive, Balanced, Multi Asset Allocation, Conservative, Equity Savings, Arbitrage, Dynamic Asset Allocation.

One of the long running hybrid mutual funds in India is the HDFC Balanced Fund. This fund invests in a mix of equity and debt instruments to generate returns for investors. The fund has an asset allocation of 65-75% in equities and 25-35% in debt securities, making it suitable for investors looking for moderate levels of risk and return.

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