Invest in Best Conservative Hybrid Funds in India 2025
Discover the best Conservative Hybrid Funds to invest in India for 2024. Learn who should invest, key benefits, risks, and find the top performing Conservative Hybrid funds.
What are Conservative Hybrid Funds?
Conservative Hybrid Funds are mutual funds that invest in a mix of equity and debt instruments, with a higher allocation towards debt (typically 75-90%) and the balance towards equities. While the debt part works towards capital preservation, equity works towards capital appreciation.
Who Should Invest in Conservative Hybrid Funds?
- Low to Moderate Risk Investors: Individuals who are looking for a balanced approach without wanting to take any risk
- First-Time Investors: New investors transitioning from fixed deposits can learn the art of mutual funds through investing in Conservative hybrid funds
- Short term Investors: These funds work big time within short term and mid-term, which means people who are looking for a short term return can opt for this fund
- Investors nearing retirement: Those who are close to their retirement age, would naturally be conservative about their funds. Rather than choosing bank deposits which offer fewer returns, it is better to go for these fund as it offers a mixture of debt and equity
Best Performing Conservative Hybrid Funds
| Fund Name | Category | Risk | 6M Return (%) | 1Y Return (%) | Fund Size (Cr.) |
|---|---|---|---|---|---|
| Kotak Debt Hybrid Fund | Conservative Hybrid | Very High | 7.65 | 16.08 | 5,254.8 |
| HSBC Conservative Hybrid Fund | Conservative Hybrid | Very High | 10.65 | 16.75 | 5,121 |
| Franklin India Debt Fund | Conservative Hybrid | Moderately High | 7.46 | 14.32 | 4,236 |
| HDFC Hybrid Debt Fund | Conservative Hybrid | Moderately High | 7.65 | 15.42 | 43,213 |
| SBI Conservative Hybrid | Conservative Hybrid | Moderately High | 8.68 | 14.68 | 39,995 |
Factors to Consider While Investing in Conservative Hybrid Funds
- Debt Quality: Assess the quality of the debt instruments in the portfolio before taking a decision to invest
- Equity Allocation: A portion of your fund goes into equity which in turn is dependent on market movements, so, understand the inherent risk associated with equity before investing
- Fund Manager’s Expertise: Evaluate the track record and experience of the fund manager in handling this type of fund.
- Historical Performance: Review this fund’s historic records over 5 years to get an idea on how this fund would perform in the next few years
- Expense Ratio: Consider the expense ratio, as it can eat up your earnings
Major Benefits of Conservative Hybrid Funds
- Higher income than bank: Hybrid Mutual funds provide better returns than bank FDs because of the capital appreciation in fund’s equity part
- Less risky: This type of mutual fund is less risky compared to other hybrid funds as a majority of your investment goes into fixed instruments.
- Lower Volatility: Less volatile than pure equity funds due to the higher allocation to debt.
- Diversification – Your investment is diversified into both debt and equity, giving you a balanced portfolio
- Professional Management: Managed by experienced fund managers who strategically allocate funds between equity and debt based on company’s performance
Risks Involved in Conservative Hybrid Funds
- Market Risk: The equity portion is subject to market fluctuations and it can affect returns
- Asset Allocation Risk: The fund’s performance depends on the fund manager’s ability to properly allocate funds to debt and equity funds
- Inflation Risk: Returns may not always keep pace with inflation at the current trend, potentially eroding purchasing power
Frequently Asked Questions (FAQs) about Conservative Hybrid Funds
1. What is the meaning of a conservative mutual fund?
Conservative Funds are those mutual funds where fund manager pool and invest 75%-90% of the money into debt and balance into equity
2. How safe are conservative funds?
It is generally considered safe as the majority of your funds are into debt securities
3. Who can invest in Hybrid Funds?
Investors who are risk averse or prefer an alternate investment avenue can invest in this fund
4. Are entry load and exit load charged in this conservative hybrid funds?
There are no riles for entry into mutual funds, while exit charges are levied for all funds and it varies from fund to fund
5. How do I choose the best Conservative Hybrid Fund?
Consider factors like historical performance, your risk tolerance, expense ratio, fund manager’s track record, and your investment goals before choosing the fund. You can seek the assistance of Fincover, whose MF experts would consider you pick the best Conservative Hybrid fund in the market