Hybrid Fund

Investments

A hybrid fund invests in a mix of equity and debt, providing moderate returns with lower volatility than pure equity. Taxation depends on equity allocation: 65%+ equity = equity tax treatment.

In detail

Types: Conservative hybrid (75-90% debt), Balanced hybrid (40-60% equity-debt), Aggressive hybrid (65-80% equity). BAF dynamically adjusts ratio. Suitable for moderate risk investors, 3-7 year goals.

Real-life example

🇮🇳 India example

Ramesh, 58, approaching retirement, shifts from 80% equity SIP to Aggressive Hybrid (65% equity). Portfolio drawdown in crash reduces from potential 40% to approximately 25%.

Frequently asked questions

Is balanced fund same as hybrid fund? ▼

Balanced fund is the older term. SEBI 2017 categorisation replaced it with hybrid fund categories. Most old balanced funds are now aggressive hybrid funds.