Hybrid Mutual Funds
Last Updated on 31 Mar 2026
3 Year Average Returns
10.19%
Funds on Anand Rathi
462
Hybrid Funds to Invest in 2026
| Fund Name | |||
|---|---|---|---|
| Quant Multi Asset Allocation Fund (G) | 23.93% | 22.73% | 20.16% |
| Quant Multi Asset Allocation Fund (IDCW) | 23.92% | 22.69% | 20.13% |
| ICICI Pru Multi-Asset Fund (G) | 10.48% | 17.63% | 18.45% |
| ICICI Pru Multi-Asset Fund (IDCW) | 10.48% | 17.63% | 18.45% |
| ICICI Pru Equity & Debt Fund - (IDCW-H) | 6.72% | 17.46% | 17.85% |
| ICICI Pru Equity & Debt Fund - (IDCW-A) | 6.77% | 17.45% | 17.85% |
| ICICI Pru Equity & Debt Fund - (G) | 6.74% | 17.46% | 17.84% |
| ICICI Pru Equity & Debt Fund - (IDCW-M) | 6.75% | 17.66% | 17.84% |
| Bank of India Mid & Small Cap Equity & Debt Fund (IDCW) | 17.30% | 20.42% | 17.47% |
| Bank of India Mid & Small Cap Equity & Debt Fund (G) | 17.27% | 20.41% | 17.45% |
| UTI-Aggressive Hybrid Fund (IDCW) | 3.76% | 20.72% | 17.42% |
| HDFC Balanced Advantage Fund (G) | 4.00% | 15.45% | 16.73% |
| HDFC Balanced Advantage Fund (IDCW) | 3.34% | 15.20% | 16.37% |
| Nippon India Multi Asset Allocation Fund-Reg (G) | 20.46% | 20.62% | 16.18% |
| Nippon India Multi Asset Allocation Fund-Reg (IDCW) | 20.46% | 20.62% | 16.18% |
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Est. Returns
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Explore Hybrid Funds by Types
Explore Mutual Funds by Types
What are Hybrid Mutual Funds?
As the name says, Hybrid Funds are mutual funds that invest in both shares and bonds. The fund manager allocates the money between the two (equity and debt) in a proportion.
The primary purpose of hybrid mutual funds is to balance risk and return by leveraging two asset classes. While the shares help your money grow, bonds keep it safe.
Benefits Of Investing In Hybrid Mutual Funds
Hybrid mutual funds offer several benefits for those investors looking for:
1. Diversification
One of the primary reasons hybrid mutual funds exist is the diversification they offer. With the mix of both equity and debt, your money not only receives stability but also growth linked to the market.
2. Balanced Risk and Return
Almost every fund manager looks for a risk-return balance, and hybrid funds are no exception. By leveraging both asset classes, your money has the potential of equities and the stability of debt instruments.
3. Income Generation
Unlike equity funds, hybrid funds allow investors to access fixed-income instruments. Due to this, your portfolio can see a passive source of income over time, along with equity yield.
4. Professional Management
Over here, experienced fund managers actively adjust the asset allocations of online hybrid funds in response to market conditions with the goal of enhancing the portfolio's NAV and efficiently managing risks.
5. Convenience and Flexibility
With hybrid funds, investors can access several asset classes with a single investment, doing away with the need to maintain distinct sportfolios for fixed-income and equity assets.
Who Should Invest In Hybrid Mutual Funds?
Hybrid mutual funds appeal to a wide range of investors because they blend equity for growth and debt for stability. They're designed for those who don't want to take full equity exposure yet wish to earn more than what traditional fixed deposits offer.
Let's look at who might find hybrid funds a smart fit:
- Conservative investors who value capital preservation but want returns greater than those of standard fixed deposits.
- Those who are new to investing and wish to hold both assets under one account.
- Investors with an investment horizon of at least 3-5 years.
- Retirees looking for regular income with a pinch of long-term appreciation.
- For anyone who prefers "one fund, many benefits," as hybrid funds spread investments in equity and debt collectively.
How Does A Hybrid Mutual Fund Work?
Hybrid mutual funds operate by combining multiple asset classes. But, primarily, they invest in equities (stocks) and fixed-income securities (bonds) within a single portfolio. This strategy gives fund managers the flexibility to change allocations between these asset classes based on market conditions.
But, how does that help?
Well, by investing in,
Stocks, the equity element, tend to increase the portfolio's value. Still, there is a risk of market fluctuations with a chance for significant long-term gains.
Fixed-income securities, like corporate or government bonds, generate income and preserve capital. This element usually involves less risk and gives the required portfolio stability.
However, the asset allocation of hybrid funds may vary from fund to fund. Due to the flexibility available with the fund manager, they can decide what percentage of assets should be invested in debt and stocks. For example, an aggressive fund will be more into equity (stocks), and the reverse is true for a conservative fund.
During this time, the fund managers closely monitor economic and market developments to adjust the asset mix. They might expand their exposure to stocks in bull markets to benefit from growth, while they might turn to debt in bear markets to protect their cash.
This mix-and-match strategy ends up lowering risk and lessening any effect on the portfolio as a whole, without relying entirely on one asset class's performance.
What Are The Types Of Hybrid Funds?
The Securities and Exchange Board of India has categorised online hybrid funds into several types, each with distinct investment strategies. The table below explains the types of hybrid funds:
| Sr. No. | Type of Hybrid Fund | Asset Allocation | Characteristics | |
|---|---|---|---|---|
| 1 | Aggressive Hybrid Fund | Equity: 65–80% | Debt: 20–35% | Invests primarily in equity and equity instruments. |
| 2 | Conservative Hybrid Fund | Equity: 10–25% | Debt: 75–90% | Focuses on capital preservation and invests largely in debt. |
| 3 | Balanced Hybrid Fund | Equity: 40–60% | Debt: 40–60% | Maintains an even balance between equity and debt. |
| 4 | Dynamic Asset Allocation / Balanced Advantage Fund | Flexible mix of equity and debt (changes with market conditions) | Adjusts allocation dynamically to manage risk and enhance return rate. | |
| 5 | Multi-Asset Allocation Fund | Minimum 10% each in at least three asset classes (e.g., equity, debt, gold) | Diversifies across multiple assets to reduce risk and capture varied growth opportunities. | |
| 6 | Arbitrage Fund | Equity: Minimum 65% (mostly hedged) | Rest in Debt/cash | It exploits market inefficiencies and achieves portfolio growth. |
| 7 | Equity Savings Fund | Equity: Minimum 65% (hedged & unhedged) | Debt: Remaining portion | Invests in equity, debt, and arbitrage instruments. |
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The information provided on this page is for informational purposes only and should not be construed as investment advice, recommendation, or solicitation to buy or sell any securities or financial pr...
Frequently Asked Questions
- Conservative investors can go for debt-heavy funds, while risk-takers can pick aggressive ones.
- Match the fund's goal (growth, income, or stability) with yours and review its past performance and the fund manager's track record.
- Equity-oriented (≥65%): LTCG taxed at 12.5% beyond ₹1.25 lakh; STCG taxed at slab rate or 20%.
- Debt-oriented (<65%): Taxed as per your income tax slab, regardless of holding period.
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