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Conservative Hybrid Funds

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Aggressive Hybrid Fund

Conservative hybrid funds invest in both stocks and bonds. They're designed for cautious investors seeking a balanced approach. These funds aim to provide stability and modest growth by diversifying into lower-risk assets like bonds alongside some exposure to stocks.

Best Conservative Hybrid Funds


Fund Name
AUM
3Y Returns
Ratings

Kotak Debt Hybrid

Hybrid  Conservative Hybrid Fund

₹3,017.08 Cr.

12.68%

4.5 

Parag Parikh Conservative Hybrid Fund

Hybrid  Conservative Hybrid Fund

₹2,451.46 Cr.

12.42%

Kotak Debt Hybrid Monthly Payout of IDCW Direct Reinvestment

Hybrid  Conservative Hybrid Fund

₹3,017.08 Cr.

12.37%

4.5 

Kotak Debt Hybrid Monthly Payout of IDCW Direct Reinvestment

Hybrid  Conservative Hybrid Fund

₹3,017.08 Cr.

12.37%

4.5 

HDFC Hybrid Debt Fund IDCW Quarterly Direct Plan Reinvestment

Hybrid  Conservative Hybrid Fund

₹3,309.97 Cr.

12.18%

HDFC Hybrid Debt Fund IDCW Quarterly Direct Plan Reinvestment

Hybrid  Conservative Hybrid Fund

₹3,309.97 Cr.

12.18%

HDFC Hybrid Debt Fund

Hybrid  Conservative Hybrid Fund

₹3,309.97 Cr.

12.17%

HDFC Hybrid Debt Fund IDCW Monthly Direct Plan Reinvestment

Hybrid  Conservative Hybrid Fund

₹3,309.97 Cr.

12.16%

HDFC Hybrid Debt Fund IDCW Monthly Direct Plan Reinvestment

Hybrid  Conservative Hybrid Fund

₹3,309.97 Cr.

12.16%

Parag Parikh Conservative Hybrid Fund Direct Plan Monthly IDCW Reinvestment

Hybrid  Conservative Hybrid Fund

₹2,451.46 Cr.

11.65%


About Conservative Mutual Funds

Conservative Mutual Funds are hybrid mutual fund schemes that invest predominantly in debt instruments while maintaining a limited exposure to equities. As per SEBI (Securities and Exchange Board of India) regulations, these funds typically invest 75% to 90% of their assets in debt instruments and the remaining 10% to 25% in equities. This makes them a popular choice among investors who are risk-averse and seek regular income along with moderate capital appreciation.

The core objective of conservative mutual funds is to provide steady returns with low to moderate risk. Since a major portion of the fund is invested in fixed-income securities like government bonds, treasury bills, and corporate debt, the fund benefits from stability. Meanwhile, the equity component offers growth potential and helps beat inflation over the long term.

How Do Conservative Mutual Funds Work?

These funds operate by creating a portfolio that balances the safety of debt with the growth potential of equity. The fixed-income instruments provide predictable returns, while the equity exposure allows the fund to capture gains when the stock market performs well.

Conservative mutual funds are managed by professional fund managers who assess market conditions, interest rates, inflation trends, and credit ratings before allocating investments. They ensure that the equity portion does not exceed the mandated limit, thus keeping the fund’s risk profile aligned with conservative investment goals.

Features of Conservative Mutual Funds

  • Low to Moderate Risk: Majority investment in debt instruments ensures capital safety, making these funds suitable for conservative investors.
  • Regular Income: Investors often receive steady income through interest from bonds and debt securities.
  • Limited Equity Exposure: A small portion of the fund is invested in equities to provide a cushion against inflation and increase return potential.
  • Tax Efficiency: Taxation is similar to debt mutual funds, where gains from investments held over 3 years are taxed as long-term capital gains.
  • Ideal for Short to Medium Term: These funds are suitable for investment horizons ranging from 1 to 3 years or more.

Who Should Invest in Conservative Mutual Funds?

These funds are best suited for individuals who:

  • Prefer capital preservation over aggressive growth
  • Are retired or nearing retirement and looking for stable income
  • Want to diversify their portfolio with minimal risk
  • Are new investors seeking to understand mutual funds without taking high risks

Conclusion

Conservative Mutual Funds offer a balanced way to invest, combining the security of debt with the growth potential of equity. While they don’t promise high returns like pure equity funds, they deliver peace of mind through capital preservation and regular income. These funds are ideal for those who want a steady and relatively safe investment option with limited equity exposure.