What are Hybrid Mutual funds?

Hybrid Funds invest in both debt instruments and equities, thereby catering to investors who have a balanced approach towards investing and want the best of both worlds. While the equity part provides the capital appreciation, the debt part provides income generation. The fund category was earlier known as Balanced Funds, but post the re-categorization of mutual funds by SEBI, got its new name.

This scheme aims to achieve maximum diversification and assured returns. And they do it via asset allocation, market analysis and portfolio diversification, ensuring maximum returns at minimal risk. Hybrid Mutual Funds provide higher returns than pure equity funds and also provide a cushion against extreme market turbulence on the back of the debt component.

Best 9 Hybrid Mutual Funds 2020

Best Hybrid Mutual Funds available for investment in the market for 2020 are:

#1 Hybrid Mutual Funds – Canara Robeco Equity Hybrid Fund – Direct – Growth

Canara Robeco Equity Hybrid Fund (Erstwhile Canara Robeco Balance) is a five-star rated fund that seeks to build a balanced portfolio, which would provide a combination of high annual return and capital appreciation. And it does so by creating a balanced portfolio made of fixed income securities along with equity shares.

The fund has 69.47% investment in Indian stocks out of which 45.1% is in large cap stocks, 12.78% is in mid cap stocks, 4.16% in small cap stocks. It has 22.99% investment in debt of which 2.23% in Government securities, 20.76% in funds invested in very low risk securities. The fund performance has suffered over the past few months owing to Covid-19 but it is expected to recover once the crisis is over.

Minimum SIP amount: Rs.1,000

Fund Manager: Cheenu Gupta, Avnish Jain, Shridatta Bhandwaldar

Exit Load: 1.00% (if redeemed within 365 days)

#2 Hybrid Mutual Funds: DSP Equity & Bond Fund – Direct – Growth

The main objective of the five-star rated, DSP Equity & Bond fund is to create long term capital appreciation from a portfolio constituted of equity and equity related securities as well as fixed income securities. 25.95% of the Fund’s Investment is in the finance sector, 18.32% is in corporate bonds while 11.69% is invested in consumer cyclicals.

Minimum SIP amount: Rs. 500

Fund Manager: Vikram Chopra, Atul Bhole

Exit Load: 1.00% (if redeemed within 360 days)

#3 Hybrid Mutual Funds – Franklin India Equity Hybrid Fund – Direct – Growth

Franklin India Balanced Fund seeks to achieve long-term capital appreciation with the stability of investment and current income from a balanced portfolio of high-quality equity and fixed-income securities. The fund managed to generate around 10% returns over the ten-year period.

The moderate performance of the fund is likely to continue given that the fund takes very few risks both on its equity or debt market investments and is an ideal fit for conservative investors. However, the returns have suffered during the past few months owing to the drop in markets. Over 50% of the fund’s investment is in Corporate bonds, Financial sector and Consumer cyclical sector.

Minimum SIP amount: Rs. 500

Fund Manager: Krishna Prasad Natarajan, Sachin Padwal-Desai, Umesh Sharma, Pyari Menon, Lakshmikanth Reddy

Exit Load: 1.00% (if redeemed within 365 days)

#4 Hybrid Mutual Funds – HDFC Hybrid Equity Fund – Direct – Growth

HDFC Balanced Fund seeks to generate capital appreciation with current income from a combined portfolio of equity and debt instruments. The fund generated over 3% returns in the five-year period. These low returns can be attributed to the recent market crisis. However, the performance is likely to get restored as the fund typically maintains a 2/3rd allocation to equity instruments and seeks to minimize the risk by investing in debt instruments.

Minimum SIP Amount: Rs. 500

Fund Manager: Chirag Setalvad, Shobhit Mehrotra, Prashant Jain 

Exit Load: 1.00% (if redeemed within 365 days)

#5 Hybrid Mutual Funds – ICICI Prudential Equity & Debt Fund – Direct – Growth

ICICI Prudential Equity & Debt Fund (erstwhile ICICI Prudential Balanced Fund) seeks to generate long-term capital appreciation and current income by investing in a portfolio that is investing in equities and related securities as well as fixed income and money market securities.

The five-star rated fund has over 67% investments in Equity Funds while 26.96% investments are done in Debt Funds.

Minimum SIP amount: Rs. 100

Fund Manager: Sankaran Naren, Manish Banthia & Atul Patel

Exit Load: 1.00% (if redeemed within 365 days) 

#6 Hybrid Mutual Funds – Aditya Birla Sun Life Equity Hybrid ’95 Fund – Direct – Growth

The objective of the scheme is to generate long term growth of capital and current income, through a portfolio investing in equity, debt and money market securities. The secondary objective is income generation and distribution of dividend.

The fund has 74.89% investment in Indian stocks of which 39.33% is in large cap stocks, 22.52% is in mid cap stocks, 5.25% in small cap stocks. Alongside, the fund has 19.76% investment in debt of which 1.4% in Government securities, 16.27% in funds invested in very low risk securities.

Minimum SIP Amount: Rs. 100

Fund Managers: Mahesh Patil, Pranay Sinha, Dhaval Shah

Exit Load: 1.00% (if redeemed within 365 days) 

#7 Hybrid Mutual Funds – Tata Hybrid Equity Fund – Direct – Growth

Tata Hybrid Equity Fund (Erstwhile Tata Balanced) seeks to provide income distribution and or capital appreciation over medium to long term and is more suited for a risk-averse investor.

The fund has 70.2% investment in Indian stocks of which 49.25% is in large cap stocks, 8.27% is in mid cap stocks, 3.23% in small cap stocks.Also, the fund has 26.95% investment in debt of which 3.66% in Government securities, 23.28% in funds invested in very low risk securities.

Minimum SIP Amount: Rs. 500

Fund Managers: Murthy Nagarajan, Chandraprakash Padiyar, Satish Chandra Mishra

Exit Load: 1.00% (if redeemed within 365 days) 

#8 Hybrid Mutual Funds – SBI Equity Hybrid Fund – Direct – Growth

The fund aims to provide investors long-term capital appreciation along with the liquidity of an open-ended scheme by investing in a mix of debt and equity. The scheme will invest in a diversified portfolio of equities of high growth companies and balance the risk through investing the rest in fixed income securities.Also, the fund has made over 50% investments in the finance sector, corporate bonds and other cash equivalents.

Minimum SIP amount: Rs. 500

Fund Manager: Rama Iyer Srinivisan, Dinesh Ahuja

Exit Load: 1.00% (if redeemed within 365 days) 

#9 Hybrid Mutual Funds – L&T Hybrid Equity Fund– Direct – Growth

L&T Hybrid Equity Fund’s (Erstwhile L&T India Prudence) main goal is to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity related securities and to generate reasonable returns through a portfolio of debt and money market instruments.

The fund has 75.53% investment in Indian stocks of which 51.67% is in large cap stocks, 13.21% is in mid cap stocks, 3.36% in small cap stocks.Also, the fund has 20.11% investment in Debt of which 5.85% in Government securities, 14.26% in funds invested in very low risk securities..

Minimum SIP amount: Rs. 500

Fund Manager: Venugopal M, Vihang Naik

Exit Load: 1.00% (if redeemed within 365 days)

So what are you waiting for? March on and start investing from here.