Hybrid Mutual Fund Distribution

Hybrid Mutual Fund distribution

“Balanced funds'' is another name for hybrid mutual funds.  These schemes give investors the benefit of a diversified portfolio at a reduced expense and with less hassle than investing in each asset class separately. Even though they have a higher risk profile than debt funds, hybrid funds are preferred by low-risk and mid-term investors for their higher safety over equity funds. Investors interested in hybrid mutual funds are invited to contact InBest as a dependable resource for building a strong investment portfolio. Inbest: Unveiling the Power of the Best Hybrid Mutual Fund. The distribution of hybrid mutual funds, which were developed to give you a well-rounded approach to wealth development in the thriving Indian market, is our area of competence. Exploring Stability with Balanced Mutual Funds with Inbest.

All About Hybrid Mutual Funds

balanced fund/hybrid fund

What Are Hybrid Mutual Funds

Hybrid mutual funds are investment vehicles that promote a balanced approach to diversified investing, while still functioning as a single portfolio. Fund schemes can be divided into a number of distinct categories that take risk profiles into account and offer options for conservative, moderate, and aggressive investors.

Debt-Oriented Conservative funds 

are designed to offer stable income, particularly through investments in large-cap equities and high-quality debt instruments. It typically uses between 75% and 90% of debt securities and just 10% to 25% of equity instruments.

Balanced funds 

allocate almost equivalent amounts of stocks and fixed-income instruments as equity and debt classes. Typically, a minimum of 40% and a maximum of 60% of the financial assets of balanced funds are allocated between equity and debt. Exploring Stability with Balanced Mutual Funds with Inbest.

Dynamic or Multi-asset allocation fund 

is based on an internal investment methodology and the state of the market, where dynamic proportions of debt and equity investments are aimed at long-term risk-adjusted returns, regardless of market conditions.

Arbitrage funds 

profit from the price differences between various markets. It works by buying securities in the cash market and selling them in the futures markets. Smart managers modify the default investment mix of 65–100% in equities and 0–35% in debt instruments based on portfolio risk while exposing the fund reservoir to both assets.

Equity-Oriented Aggressive funds 

have a corpus of 60–80% in equities and 20–35% in debt instruments. These schemes are riskier than debt fund schemes and are best suited for ambitious investors with the guts to take on the risk in hopes of earning greater returns.

How Hybrid Funds Work

Hybrid mutual fund investments work through the strategic allocation of asset classes. Both active and passive funds are compatible. While traditionally, hybrid funds are about maintaining debt and equity proportions, there are schemes that allow investors to adjust their portfolios in reaction to shifting market conditions. Inbest: Unveiling the Power of the Best Hybrid Mutual Fund. The fund manager has to go through various factors to determine how to allocate appropriate instruments.

Developing an Investment Portfolio:  

The efficiency of a diversified investment portfolio is influenced by how the fund manager analyses and selects particular securities. It may include a variety of individual stocks, mutual funds, or exchange-traded funds (ETFs) to gain exposure to various asset classes.

Monitoring & Portfolio Management:  

Making timely adjustments to the asset allocation is the best approach to counteract market volatility, spot opportunities, mitigate risk, and maximise profits. In order to lower risk, the fund manager may raise the allocation to cash or fixed-income securities.

Portfolio Rebalancing:  

Investors that need to preserve the target of their asset allocation, must endorse the discipline of rebalancing the portfolio consistently. The portfolio could depart from its initial allocation as the values of various asset classes change. Rebalancing allocations mean purchasing or selling off funds that will keep the investment strategy afloat.

Investor Participation: 

At the current net asset value (NAV) of the fund, investors may purchase units or shares of the hybrid mutual fund. The value of the fund's assets minus its liabilities, divided by the number of outstanding units or shares, is the NAV. Investors can keep an eye on the progress of their investment, add to it, or redeem their units as needed.

Investing in Hybrid Funds

Hybrid funds work with two fundamental objectives: long-term capital profitability and short-term returns. To achieve these two objectives, hybrid funds use a combination of equity and debt. The hybrid fund investment is appropriate for investors who can commit to holding the units for a long-term horizon of at least three to five years. Investors can gain exposure to multi-asset funds that cover asset classes such as gold, real estate, and equities, as well as sub-classes of large-cap, mid-cap, or small-cap corporations, as well as value or growth stocks and bonds. Investing in hybrid funds involves all the following factors:

Setting an investment objective 

to build a well-balanced portfolio with a mix of equity (stocks) and debt (bonds) securities.

Research and compare 

different hybrid funds to define a meaningful investment strategy. Research parameters typically include past performance, fees, and ratings from independent organisations.

Fund allocation 

is characterised by flexible conditions in which you can contribute a lump sum payment or go for frequent smaller investments such as monthly or quarterly contributions. You must have enough money in your account to pay your initial investment as well as any continuing fees or expenditures.

Partner with an independent hybrid fund distributor 

to assist you with account creation, finding the best investment schemes, and providing tax advice. You must seek unbiased guidance and assistance where your prosperity and success are prioritised.

Hybrid Fund Taxation in India

In India, hybrid funds are taxed under the two categories of equity-oriented hybrid funds and debt-oriented hybrid funds, depending on whether they are long-term or short-term capital assets. Earnings from these investments are taxed as per the capital gains tax rates established by the Income Tax Act. The following are the essential considerations about Indian tax rules for earnings from hybrid mutual fund investments:

Type of Funds:  

Hybrid funds having 65% or higher stock exposure are classed as equity funds, while the rest are categorised as debt funds.

Asset Classification:  

An equity-oriented hybrid fund unit is classified as a "short-term capital asset" if held for less than 12 months and as a "long-term capital asset" if held for more than 12 months. All other units in a mutual fund scheme are classified as "short-term capital assets" if held for less than 36 months and as "long-term capital assets" if kept for more than 36 months.

Tax Rate: 

The equity component's short-term capital gains (STCG) are taxed at a 15% rate. Long-term capital gains on the equity component exceeding Rs.1 lakh are taxed at 10%. LTCGs from the debt component are taxed at 20% with indexation benefits and 10% without indexation benefits.


The dividends earned through equity-oriented hybrid funds are tax-free for the investor, while dividends from debt-oriented hybrid funds are subject to a dividend distribution tax (DDT).

Frequently Asked Questions

Indian residents, non-resident Indians (NRIs), and foreign investors can invest in hybrid funds. Eligibility criteria for investing in hybrid funds are mainly determined by the regulations established by fund houses or asset management firms (AMCs). Investors must meet the Know-Your-Customer (KYC) requirements and adhere to the standards established by the Association of Mutual Funds in India (AMFI) and the Securities and Exchange Board of India (SEBI). Inbest is  Exploring the Potential of Hybrid Mutual Funds.

Hybrid funds provide diversification across asset classes while still functioning as a single investment instrument. In the long term, there is a greater chance of generating both a consistent income and capital growth. Depending on the fund's investment goal and strategy, the asset allocation can change in hybrid funds. Navigate Wealth Growth with Hybrid Funds Investment with Inbest.

Hybrid funds are, indeed, safe. In fact, they are usually safer than equity funds since they comprise a mix of equities and bonds, giving a balance of potential returns and stability. But, like with any other investment strategy, there are certain risks that are unavoidable and require a thorough research before investing. Navigate Wealth Growth with Hybrid Funds Investment with Inbest.

Hybrid funds are, in fact, secure and stable. Because they work out a combination of stocks and bonds, they are typically safer than equity funds for providing a balance of possible returns. In terms of risks, they are just like any other investment plan in that they are inevitable and necessitate extensive study before investing. Inbest is Exploring the Potential of Hybrid Mutual Funds.

Request A Call