Understanding Conservative Hybrid Mutual Funds
Conservative hybrid funds invest a major portion in debt instruments, with an allocation of at least 75%. They are suitable for conservative investors who don't want a high exposure to equities.
Conservative hybrid funds can be considered as an alternative to bank FDs.
25% equity portion to provide growth to the portfolio.
For investors with a 3-year horizon.
Top schemes of Conservative Hybrid Mutual Funds
| Fund Name | Returns | Actions | ||
|---|---|---|---|---|
| 1 Year | 3 Year | 5 Year | ||
Returns calculator
Total Invested : ₹ 6,00,000
Profit : ₹ 56,200,000
Current value : ₹ 1,16,20,000
Frequently Asked Questions
Which is the best conservative hybrid fund?
The best conservative hybrid fund for an investor will depend on individual risk tolerance, investment goals, and the specific performance metrics of each fund. Evaluating these factors will help you select a fund that aligns with your goals.
Is a conservative hybrid fund better than FD?
When Is a Conservative Hybrid Fund Better?
If you're investing for 3+ years.
If you want better post-tax returns than FD over the long term.
If you're okay with slight market fluctuations for higher potential gains.
If you're in the lower tax bracket (since debt mutual funds are more tax-efficient than FDs).
When Is FD Better?
If you want 100% guaranteed returns with no market risk.
If you need short-term savings (less than 3 years).
If you prefer fixed, predictable interest payments.
If you are a senior citizen, banks offer higher FD rates.
What is the difference between an aggressive hybrid and a conservative hybrid fund?
Aggressive hybrid funds and conservative hybrid funds differ in asset allocation and risk level. Aggressive hybrid funds have a higher portion of equity (minimum 75%), while the rest is allocated towards debt. Conservative hybrid funds have a major portion allocated towards debt (minimum 75%) and the rest towards equity.
What is the HDFC hybrid debt fund?
HDFC hybrid debt fund is a conservative hybrid fund that invests a major portion in debt instruments.
Is the conservative hybrid fund safe?
Conservative hybrid funds are relatively safe compared to equity funds, with a majority portion allocated towards debt. However, they are not completely immune to market volatility.
How is a conservative hybrid taxed?
Since conservative hybrid funds invest 75-90% in debt and 10-25% in equity, they are taxed as debt funds, not equity funds.
Debt funds are taxed at the investor's income slab after April 1, 2023. Those who purchased before are taxed at 12.5% after a 3-year holding period.
What are the advantages of conservative funds?
Conservative hybrid funds offer relatively stable returns and growth. Here are some other advantages:
Diversification benefits
Safer than equity funds
Better than FD for long-term returns
Can offer regular income with higher growth potential
Who should invest in conservative hybrid funds?
Investors who are looking for higher returns than FDs but with lower risk than equity funds.
Conservative investors who want stability with some equity exposure.
People investing for medium-term goals (3+ years).
Retirees who are looking for regular income with some growth potential.