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Aditya Birla Capital LimitedAditya Birla Capital Limited (“ABCL”) is a listed systemically important non-deposit taking Non-Banking Financial Company (NBFC) and the holding company of the financial services businesses. ABCL and its subsidiaries/JVs provides a comprehensive suite of financial solutions across Loans, Investments, Insurance, and Payments to serve the diverse needs of customers across their lifecycles. Powered by over 61,600 employees, the businesses of ABCL have a nationwide reach with over 1,690 branches and more than 200,000 agents/channel partners along with several bank partners.
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What is a Balanced Hybrid Fund?
A Balanced Hybrid Fund is a type of hybrid mutual fund that invests in a balanced mix of equity and debt. The fund offers stable returns and has a moderate risk profile.
Advantages of Balanced Hybrid Funds
Moderate risk
The equity and debt exposure can be changed depending on market movements. This stabilises the portfolio and reduces the risk considerably.
Portfolio diversification
Enjoy a diversified portfolio of equity and debt instruments managed actively to generate the maximum possible returns while minimising risks.
Stable returns
The equity component of the fund has the potential to offer good returns on investments.
Capital Appreciation
The blend of equity for growth and debt for stability offers the potential for capital appreciation while actively managing downside risk through adjustments in asset allocation.
Explore Balanced Hybrid Funds
Most Popular
AUM: 23427(Cr)
Risk: Very High
- MIN. INVESTMENT 500
- 5 YRS RETURNS 33.32%
- Invest (Per Month) ₹10000
- Get (30 Yrs) ₹24,850*
*Projections/estimations is backtested using historical data.
Most Popular
- AUM: 23427(Cr)
- Risk: High
- MIN. INVESTMENT 1000
- 5 YRS RETURNS 33.32%
- Invest (Per Month) ₹15000
- Get (30 Yrs) ₹34,850*
*Projections/estimations is backtested using historical data.
Balanced Hybrid Funds Returns Calculator
REGULAR INVESTMENT
SIP
Invest systematically in regular amounts and build a corpus with a disciplined investing habit.
START SIPONE TIME INVESTMENT
Lump sum
Invest once with the facility of lump sum investing and save at your will. Time the market correctly and earn good returns.
INVEST LUMPSUMTotal Amount Invested
₹ 0
after 30 years you will get a return of
₹ 0
Disclaimer: Projections/estimations is backtested using historical data.
Total Amount Invested
₹ 0
after 30 years you will get a return of
₹ 0
Disclaimer: Projections/estimations is backtested using historical data.
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Understanding Balanced Hybrid Funds
Table of Contents
What are Balanced Hybrid Funds?What are the features of Balanced Hybrid Funds?What are the different types of hybrid funds?What should be the investment horizon for Balanced Hybrid Funds?What is the tax implication of Balanced Hybrid Funds?What are the payout options?Who should invest in Balanced Hybrid Funds?
What are Balanced Hybrid Funds?
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Balanced Hybrid Funds are open-ended hybrid mutual fund schemes that invest in equity and debt. The allocation to equity and debt ranges between 40% and 60% and fund managers can allocate the portfolio depending on market movements.
What are the features of Balanced Hybrid Funds?
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A minimum 40% allocation in equity or debt and the maximum is 60%
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The fund has a moderate risk profile
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Fund managers have the flexibility to increase or decrease the equity and debt exposure in tune with market movements
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Suitable for investors who are looking for stable returns with moderate risks
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Invest through SIPs or lump sum
What are the different types of hybrid funds?
Aggressive Hybrid Funds
Funds that invest 65% to 80% of their portfolio in equity securities and 20% to 35% in debt
Equity Savings Funds
Funds that invest in equity, debt and arbitrage opportunities. A minimum of 65% of the portfolio is invested in equity and 10% in debt
Conservative Hybrid Fund
Hybrid funds which invest 75% to 90% of the portfolio in debt and the remainder in equity
Multi-Asset Allocator Fund
Funds that invest at least 10% of the portfolio in three different asset classes
Arbitrage Funds
Funds that invest in arbitrage opportunities. At least 65% of the fund is invested in equity
What should be the investment horizon for Balanced Hybrid Funds?
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Balanced Hybrid Funds have the flexibility to be equity-oriented or debt-oriented
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As such, they have a moderate risk profile
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You can invest for a medium to long-term duration for attractive returns
What is the tax implication of Balanced Hybrid Funds?
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Balanced Hybrid Funds do not have a minimum of 65% allocation in equity
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As such, they attract debt taxation on the capital gains earned
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The returns earned are taxed at your income tax slab rates
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Dividends earned, if any, are taxed at your income tax slab rate
What are the payout options?
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Dividend option
Earn dividends on your investment at regular intervals
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Growth option
Accumulate the returns over the investment tenure and get a lump sum amount on redemption
Who should invest in Balanced Hybrid Funds?
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New equity investors
You can protect against high volatility risks with moderate exposure to equity, which can change if the markets turn volatile
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Investors with a moderate risk profile
Since the fund can switch between a high equity or debt exposure, they have a moderate risk profile and suit investors with the same risk profile
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Investors looking for good returns
If you want equity-oriented returns with lower risks, Balanced Hybrid Funds can be a good choice.
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FAQs On Balanced Hybrid Funds
As its name suggests, Balanced Hybrid Funds are a type of funds which diversify the portfolio of the investor by investing in varied classes of assets, consisting of both equity such as stock and debt such as bonds. This hybrid fund aims to provide both stability and capital appreciation through its debt and equity allocation respectively.
Balanced Hybrid Funds face market risk as the performance of equity instruments is subject to fluctuations in the market and interest rate risk as debt investments are influenced by changes in the interest rates. Other risks may include credit risk, volatility risk, and concentration risk.
While investing in balanced funds, consider your risk appetite, investment horizon, and expense ratio and asset allocation. It is necessary to analyse your financial goals according to your investment horizon and risk appetite. Then invest in balance funds which align your investment horizon and risk appetite with your financial goals.
Balance hybrid funds invest 40-60% of the funds in equity and the rest in debt. It offers a balanced approach to investments and reaps both capital appreciation and returns through its diversified portfolio. You can consider investing in Balanced Hybrid Funds if you are looking for growth and capital appreciation as well as stability and capital protection without taking too much risk as in pure equity funds.
Balanced Hybrid Funds are safer the other equity mutual funds . Its allocation to debt instruments helps to neutralise the market volatility of the portfolio of the investor making it a safe avenue with comparatively lower risk than equity hybrid funds.
Balanced Hybrid Funds invest 40-60% of the investments in equity instruments whereas conservative hybrid funds invest only 10-25% of the investments in equity and the rest in debt. Conservative hybrid funds are low-risk funds with moderate returns and Balanced Hybrid Funds are comparatively riskier with the potential for higher returns than conservative hybrid funds.
Some Balanced Hybrid Funds charge an exit load when these funds are redeemed within a specified lock-in period.
Some Balanced Hybrid Funds allow regular monthly investments through SIP. Check the terms of investment of the Balanced Hybrid Funds before investing.
You can redeem the Balanced Hybrid Funds online through the website of the fund house or by visiting their branch office.
You can withdraw or redeem the balance of hybrid funds any time you want. However, check the exit load charges applicable for early redemption within a prescribed period which is generally 3 years.
The taxation of balance hybrid funds depends on their allocations between equity and debt and their holding period. For equity-oriented balance funds which have higher exposure to equity, short-term capital gains which has less than a year holding period are taxed at 15% and long-term capital gains having more than one year holding period are taxed at 10% with an exemption of up to Rs. 1 lakhs. Alternatively, for debt-oriented balance funds which have higher exposure to debt, short-term capital gains are taxed at the applicable slab rate of the investor and long-term capital gains are taxed at 20% with indexation benefits.
Balanced Hybrid Funds provide moderate returns and capital protection with lower volatility as compared to pure equity mutual funds.
The performance of Balanced Hybrid Funds is influenced by several factors such as interest rate changes, market fluctuations, fund managers' investment strategies, asset allocation and credit quality of the debt instruments.
You can track the NAV of the balance hybrid on the website of the fund house. Alternatively, it is generally updated on the financial platforms for investors to keep track of it.
The expense ratio is the fees charged by the fund managers to manage the fund's assets. It is expressed as a percentage of the total assets under the management. The expense ratio varies among different hybrid mutual funds. It is generally arranged 1 to 2%. Check the expense ratio of the balance hybrid funds you are interested in before investing.
The primary difference between Balanced Hybrid Funds and balanced advantage funds is that the former maintains a fixed allocation of 60% and 40% in the equity and debt instruments whereas there is no fixed allocation as such in balanced advantage funds and are generally decided by the fund managers based on the market conditions.
The disadvantages of balanced funds are that they underperform pure equity funds, particularly during the bull market as a significant part is allocated to debt. It offers moderate returns and is exposed to market risks.
The choice between equity or balanced funds depends on individual investment goals and risk appetite. Equity mutual funds offer higher returns but at higher risk and volatility whereas balanced funds offer a balance between stability and growth with moderate returns and lower risk.
Types of Hybrid Mutual Funds
Equity-Oriented Fund
Other asset class funds
Debt Funds
Invest in debt securities for low risks and stable returns.
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Equity Fund
Give your savings the growth they deserve. Invest in Equity Funds and unlock the potential of long-term growth
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ETF Funds
Invest in funds listed and traded on the stock exchange
Fund of Funds
Mutual funds that invest in other mutual funds both in India and globally
Index Fund
Passively-managed mutual funds tracking a particular index
Know More