Best Conservative Hybrid Mutual Funds to invest in 2021

Best Conservative Hybrid Mutual Funds to invest in 2021

Best Conservative Hybrid Mutual Funds to invest in 2021Top & Best Conservative Hybrid Funds to invest in 2021-2022

Stock markets are at peak level. No one is able to predict whether stock markets would crash or continue to reach new highs. Many investors have missed this rally and want to continue to participate in equity, but fear whether it would crash in coming days. Some investors want to book profits in mutual funds, but still want to continue to have some exposure to equity. If you are one among such investors, you can look at investing in conservative hybrid mutual funds. Conservative hybrid mutual funds would invest quarter of the portfolio in equity and balance in debt instruments. In this article we would detail some of the Top and Best Conservative Hybrid Mutual Funds to Invest in 2021-22 in India.

Also Read: Best Flexicap Mutual Funds to invest in 2021

What are Conservative Hybrid Mutual Funds?

Hybrid mutual funds also termed as balanced mutual funds would invest in equity and debt segments.

Conservative hybrid mutual funds invest 10% to 25% in equity and related equity instruments and balance in debt instruments. In simple terms, such funds would invest predominantly in debt instruments while allocating some portion in equity related securities.

Benefits of investing in Conservative Hybrid Funds

Conservative hybrid mutual funds invests majorly in debt instruments which brings stability to the investors portfolio.

Conservative hybrid funds invest some portion in equity related instruments which can help to get higher returns compared to FDs. Such funds can also beat some of the top performing debt funds.

These funds would invest in debt + equity, hence these can be considered as moderate risk.

Who should invest in conservative hybrid mutual funds?

Any of the following investors can invest in these conservative hybrid mutual funds.

1) Investors who are worried that stock markets have reached at peak level and cannot invest in equity funds.

2) Investors who have good gains in mutual funds now in this bull run, but worried that such gains might fall if stock markets crashes and wanted to shift some funds to debt segment.

3) Investors who have missed the stock market rally earlier, want to invest some portion in equity, but scared of the stock market volatility and fluctuations.

4) Investors who want to get higher returns than bank FDs (in the range of 7% to 10%)

Best Conservative Hybrid Mutual Funds to invest in 2021-22

Here are the list of funds in this segment.

#1 – Kotak Debt Hybrid Fund

#2 – Canara Robeco Conservative Hybrid Fund

#3 – ICICI Prudential Regular Savings Fund

#4 – SBI Debt Hybrid Fund

Best Conservative Hybrid Funds for 2021-22 – Investment Objective and Scheme Performance

#1 – Kotak Debt Hybrid Fund

Investment objective: The fund seeks to enhance returns over a portfolio of debt instruments with a moderate exposure in equity and equity related instruments. By investing in debt securities, the scheme will aim at generating regular returns, while enhancement of return is intended through investing in equity and equity related securities.

Where does the scheme invest?

Currently it invests 66% in debt, 24% in equity and holds 10% in cash.

In equity segment, it holds almost 50 stocks. Fall in share prices of few stocks might have less impact.

In debt segment, it invested 53% in govt securities, 5% in AAA rated securities and 7.4% in AA rated debt instruments. From investment perspective, such allocation can be considered as low risk.

How did the scheme perform in the last 5 years?

1 Year return – 21.75%

3 year annualized returns – 13.1%

5 year annualized returns – 10.55%

1 Lakh invested 5 years back would have turned to 1.65 Lakhs.

It is able to beat its benchmark and peers in 1 to 5 years returns and is one of the best conservative hybrid mutual funds to invest in 2021-2022.

#2 – Canara Robeco Conservative Hybrid Fund

Investment objective: The fund seeks to generate to income through investment primarily in debt securities with marginal exposures in equity and money market instruments of various maturities and risk profile.

Where does the scheme invest?

Currently it invests 70% in debt, 23% in equity and holds 7% in cash.

In equity segment, it holds 34 stocks. Fall in share prices of few stocks might have less impact.

In debt segment, it invested 52% in govt securities, 18% in AAA rated debt securities. From investment perspective, such allocation would be almost zero risk.

How did the scheme perform in the last 5 years?

1 Year return – 18%

3 year annualized returns – 13%

5 year annualized returns – 10.2%

1 Lakh invested 5 years back would have turned to 1.62 Lakhs.

Even this fund is able to beat its benchmark in 1 to 5 years returns and is one of the top conservative hybrid funds for 2021-2022.

#3 – ICICI Prudential Regular Savings Fund

Investment objective: The scheme seeks to generate long-term capital appreciation by investments in money market and debt instruments.

Where does the scheme invest?

Currently it invests 56% in debt, 20% in equity and holds 24% in cash.

In equity segment, it holds 43 stocks. Fall in share prices of few stocks might have less impact.

In debt segment, it invested 33% in AA rated debt securities, 12% in govt securities, 6.5% in AAA rated debt instruments and around 5% in A rated debt instruments. From investment perspective, such allocation would be has some element of risk as it invests in A rated debt instruments.

How did the scheme perform in the last 5 years?

1 Year return – 15.4%

3 year annualized returns – 11%

5 year annualized returns – 10.2%

1 Lakh invested 5 years back would have turned to 1.62 Lakhs.

This fund invests some portion in A rated bonds where there is element of risk. Beyond this, it invested in AA / AAA rated bonds and Government securities which are less risk. It is able to beat its benchmark in 1 to 5 years returns and is one of the best conservative hybrid funds in India.

You may also like:  Best Balanced Mutual Funds to invest in 2021

#4 – SBI Debt Hybrid Fund

Investment objective: The scheme seeks to provide the investors an opportunity to invest primarily in Debt and Money market instruments and secondarily in equity and equity related instruments.

Where does the scheme invest?

Currently it invests 67% in debt, 24% in equity and holds 9% in cash.

In equity segment, it holds 40 stocks. Fall in share prices of few stocks might have less impact.

In debt segment, it invested 32% in govt securities, 15% in AA rated debt securities, 13% in AAA rated debt instruments and around 7% in A1+ rated debt instruments. From investment perspective, such allocation has some element of risk as it invests in A rated debt instruments.

How did the scheme perform in the last 5 years?

1 Year return – 21%

3 year annualized returns – 12%

5 year annualized returns – 9.1%

1 Lakh invested 5 years back would have turned to 1.55 Lakhs.

This fund invests some portion in below AA rated bonds where there is element of risk. Beyond this, it invests in AA / AAA rated bonds and Government securities which are low risk. It is able to beat its benchmark in 1 to 5 years returns and is one of the best conservative hybrid funds for 2021-2022.

List of Conservative Hybrid Mutual Funds and their Performance

Here is the list of funds with annualized returns.

Conservative Hybrid Funds 2021
Fund Name 3 Yrs 5 Yrs
Kotak Debt Hybrid Fund 13.1% 10.5%
Canara Robeco Conservative Hybrid Fund 13.0% 10.2%
ICICI Pru Regular Savings Fund 11.0% 10.2%
SBI Debt Hybrid Fund 12.0% 9.1%

Have you liked our tips and analysis? Then share it on your Facebook, Twitter, Telegram and other social media which might be useful to your friends too.

Suresh KP

16 thoughts on “Best Conservative Hybrid Mutual Funds to invest in 2021”

  1. Hi Suresh, though PPFAS is just a 3-month old fund and may not have historic return to compare, isn’t their portfolio the most conservative with reasonable YTM for debt holdings?

    1. If it is just 3 months old, that does not mean it has reasonable YTM for debt holdings. New funds are like testing them. However existing funds have historical performance. Our guess to buy may be right or wrong, but there is some base to discuss.

Leave a Reply

Your email address will not be published. Required fields are marked *