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Five Best Performing Conservative Hybrid Funds to Invest in

Highlights

  • What makes conservative hybrid funds ideal for risk-averse investors?
  • It’s due to the asset allocation where 75% goes into debt and the rest in equity instruments - Read this post to know things in detail

Conservative hybrid funds, as the name suggests, are suitable for risk-averse and conservative investors. These funds are a type of hybrid funds that predominantly invest in debt securities such as corporate bonds, commercial papers, government securities, money market instruments. As per SEBI regulations, a minimum 75% of the portfolio should be in debt and 10% in equity. The rest 15% allocation can be done by the fund manager based on his/her discretion. If the fund manager feels that equity will do better, then this 15% is allocated to equity and vice-versa. These funds are ideal for investors who wish to invest in debt funds but want a little flavour of equity as well. The 10-25% portfolio in equity gives that kicker to the overall returns when equity markets do well. In that scenario, these funds deliver better returns than debt funds. Let us look at the best performing conservative hybrid funds.

Top Mutual Funds to Invest in Now

Best Performing Conservative Hybrid Funds

Axis Regular Saver Fund

This fund is offered by Axis Mutual Fund, which is a subsidiary of Axis Bank. These are the key features of this fund:

  • This fund is benchmarked against the Nifty 50 Hybrid Short Duration index.
  • It was launched on 16th July 2010 and is rated three stars by Value Research.
  • This fund is ideal for investors with a time horizon of more than three years.
  • It has delivered 7.08% annualized returns since launch.
  • The fund manages an AUM of INR 172 crores and the current portfolio has 32 stocks and 17 bonds. The debt portion has 70% investment in AAA-rated bonds and 5% in AA bonds, the rest 25% in equity shares.
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BNP Paribas Conservative Hybrid Fund

This fund is offered by BNP Paribas Mutual Fund. These are the key features of this fund:

  • This fund is benchmarked against the Crisil Short term Debt Hybrid Index
  • It was launched on 23rd Sep 2004 and is rated four stars by Value Research.
  • This fund is ideal for investors with a time horizon of more than three years.
  • It has delivered 7.23% annualized returns since launch.
  • The fund manages an AUM of INR 309 crores and the current portfolio has 31 stocks and 15 bonds. The debt portion has 75% investment in AAA-rated bonds and 5% in AA bonds, the rest 20% in equity shares.

Canara Robeco Conservative Hybrid Fund

This fund is offered by Canara Robeco Mutual Fund. These are the key features of this fund:

  • This fund is benchmarked against the Crisil Hybrid Index
  • It was launched on 2nd April 2001 and is rated four stars by Value Research.
  • This fund is ideal for investors with a time horizon of more than three years.
  • It has delivered 10.79% annualized returns since launch and has been one of the top performers over the years.
  • The fund manages an AUM of INR 218 crores and the current portfolio has 33 stocks and 19 bonds. The debt portion has 75% investment in AAA-rated bonds and the rest 25% in equity shares.

ICICI Prudential Regular Savings Fund

This fund is offered by ICICI Prudential Mutual Fund, which is among the largest mutual fund companies in India. These are the key features of this fund:

  • This fund is benchmarked against the Nifty 50 Hybrid Index
  • It was launched on 30th March 2004 and is rated five stars by Value Research.
  • This fund is ideal for investors with a time horizon of more than three years.
  • It has delivered 9.74% annualized returns since launch and has been a consistent performer.
  • The fund manages an AUM of INR 1,544 crores and the current portfolio has 32 stocks and 27 bonds. The debt portion has 70% investment in AAA-rated bonds and 15% in A & below-rated bonds, the rest 15% in equity shares.
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Kotak Debt Hybrid Fund

This fund is offered by Kotak Mutual Fund. These are the key features of this fund:

  • This fund is benchmarked against the Crisil Hybrid Index
  • It was launched on 2nd Dec 2003 and is rated four stars by Value Research.
  • This fund is ideal for investors with a time horizon of more than three years.
  • It has delivered 7.51% annualized returns since launch.
  • The fund manages an AUM of INR 236 crores and the current portfolio has 45 stocks and 22 bonds. The debt portion has 70% investment in AAA-rated bonds and 10% in AA bonds, the rest 20% in equity shares.

Should You Invest in Conservative Hybrid Funds?

These funds are ideal for first-time investors in mutual funds who do not want to invest their major portfolio in equity. Also, risk-averse investors investing in fixed deposits can look at allocating a portion to these funds since 75% is going into debt and you get a kicker in returns through 25% in equity. We recommend investing in one or two of these funds based on the facts above or splitting your investments among these five funds if you are looking to invest only in conservative hybrid funds.

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