General, Investment, Mutual Funds, Stock Market

Best Hybrid Mutual Funds Available in the market


A hybrid mutual fund is an investment fund that offers diversified portfolio and invests in diversified classes of assets. More often they invest in stocks and bonds. Most hybrid funds are a combination of debt and equity securities in varying proportions. The term hybrid is used to indicate that it invests in multiple classes of assets. They are also commonly known as asset allocation funds. Such investments are suitable for those who want to make money without much volatility. They are less volatile because they do not entirely invest in stocks. That is the reason they are recommended to new investors to mutual funds.

They are recommended to new investors because they can be managed by the investors themselves and they generate great returns because they are combination of different class of assets. They contain combination of best bonds and stocks which involve less risk and provides aggressive returns.


We have

  • Debt Oriented Hybrid Funds
  • Equity Oriented Hybrid Funds
  • Arbitrage Funds
  • Asset Allocation Funds


When a fund manager invests 60% or more in debt and rest in equity then it is called debt-oriented hybrid funds. Monthly Income Plan (MIP) would fall under this category and has a marginal exposure to equity, which is not more than 30%. The investor will receive regular returns on the investment (on an annual, half-yearly, quarterly or monthly basis).


These funds are concentrated mostly around equity, the exposure to equity is more when compared to exposure to debt. They are more volatile since they concentrate on equity. Balanced funds are equity oriented hybrid funds and with an exposure of about 65% to equity is a best option to make equity fund have tax benefits and good returns.


Arbitrage funds are hybrid funds where the fund manager tries to buy stocks at lower price in one market and selling them at higher price in another market to maximize the returns. In this type a large portion is invested in debt instruments. These funds are associated with some amount of risk.


This is one type of hybrid fund where the exposure to debt and equity keeps varying.

We have different hybrid funds such as following:

ICICI Prudential Equity & Debt Fund:

ICICI Prudential Asset Management Company Ltd is one of the largest Asset Management Company in India. They are best known for their services such as mutual funds, portfolio management, services, etc.

This scheme aims at generating long term capital income and invests in portfolios which assures fixed income as well as market security. It has equity allocation of 60-80% and debt 40-49%.

HDFC Balanced Fund:

This fund is managed by HDFC Asset Management Company Ltd. The scheme aims at generating capital appreciation with current income from a combined portfolio of equity and debt instruments. Under normal circumstances the scheme would take 60 % exposure to equity instruments while the balance would be allocated to debt instruments.

SBI Dynamic Asset Allocation Fund:

SBI Funds Management Ltd AMC is the fund management company. The minimum investment in this scheme is 5000 and on exiting before 1 year 1% must be paid for redemption. It is an open-ended type investment scheme.

Aditya Birla Sun Life Equity Hybrid ’95 Fund:

This is an open-ended investment managed by Aditya Birla Sun Life Mutual Fund. The risk involved here is moderate. It starts with a minimum investment of 500 rupees.

Tata Retirement Savings Fund – Moderate Plan:

This fund aims at providing planning tool for long term benefits based on the goals of investors. Tata Mutual Fund is the fund house that manages this scheme. The minimum investment in this scheme is 5000. It has been providing 18.11% returns since launch.




CA Rachit Jain

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