Mutual Funds · Category
Explore & investHybrid Funds
Funds that hold a mix of equity, debt and sometimes gold or other assets — one fund doing part of the asset-allocation work.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
At a glance
- Who typically explores it
- Typically explored by investors who want one fund to hold more than one asset class, first-time investors wary of pure-equity swings, and those who prefer rebalancing handled within the fund.
- Time horizon
- Three years or more for most hybrid funds; longer for equity-heavy types. Arbitrage funds are often used for shorter periods.
- Volatility
- Ranges from low (arbitrage, conservative hybrid) to moderately high or high (aggressive hybrid, dynamic funds at high equity levels).
A general description of the category. Individual schemes differ — read each scheme’s documents.
Understand
01Hybrid Funds
What hybrid funds are
A hybrid fund invests across more than one asset class within a single portfolio. The mix is set by its category and mandate, and the fund rebalances internally, so you don't have to move money between funds yourself. That convenience is the point — and also the trade-off, because the mix is the fund's, not tailored to you.
02Hybrid Funds
The main types
| Type | Rough equity share | Character |
|---|---|---|
| Conservative hybrid | 10–25% | Mostly debt, with a little equity |
| Balanced hybrid | 40–60% | Roughly even split |
| Aggressive hybrid | 65–80% | Mostly equity, with a debt cushion |
| Dynamic asset allocation / balanced advantage | Varies | Equity share moves with a model or valuation signal |
| Multi-asset allocation | Varies | At least three asset classes, each at least 10% |
| Equity savings | 65%+ including hedged positions | Equity, arbitrage and debt combined |
| Arbitrage | 65%+ fully hedged | Earns the price gap between cash and futures markets |
Note: Since SEBI's February 2026 changes, fund houses may offer both an aggressive hybrid and a balanced hybrid fund, and arbitrage funds may hold only short-dated government securities and government-bond repos in their debt portion.
03Hybrid Funds
What to think about
- Read the riskometer, not the name. "Balanced advantage" funds can hold a lot of equity at times. The riskometer and the latest portfolio tell you more.
- Arbitrage funds behave differently. Their returns resemble very short-term debt, but they are usually taxed as equity funds because of how they hold equity.
- Compare with doing it yourself. Holding separate equity and debt funds gives you control over the split and when to rebalance; a hybrid fund trades that control for simplicity.
Ideas to know
How gains are taxed
Hybrid Funds: tax in brief
Follows the fund’s equity share. Hybrid funds with at least 65% in Indian equity — including arbitrage and many equity savings funds — are taxed like equity funds. Funds with more than 65% in debt are taxed like debt funds (slab rate for units bought from April 2023). Funds in between have their own holding-period and rate rules. Check how the scheme is classified for tax. Tax rules change and depend on your circumstances. This is general education, not tax advice — check the latest provisions or speak to a tax professional.
Schemes in hybrid funds
Live scheme data isn’t connected yet
Before you decide
Risks to understand
Allocation risk
The fund’s mix may not match your own needs, and dynamic funds can change their equity share significantly.
Market and interest-rate risk
Each component carries its own risks: equity prices can fall and bond prices move with interest rates.
Model risk
Dynamic funds rely on a valuation or trend model to shift allocation. Models can be wrong for long periods.
The riskometer, SIPs and common questions
Related
Plan for it
Other categories
Next step
Small decisions compound.
Model a SIP with your own assumptions, size the goal it’s for, or talk to a CompoundX expert about how this category fits what you already own.
Disclosures
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
Past performance may or may not be sustained in future. Calculators and illustrations on this site use hypothetical assumptions; actual returns may differ.
[To be confirmed by Compliance] Mutual-fund onboarding, KYC and transaction execution are processed through the platform of our investment platform partner, AssetPlus. CompoundX provides education, tools and relationship management, and does not hold client money or units. Registration details, where applicable, are listed on our Disclosures page.
Partner: AssetPlus · Investment platform
CompoundX works with AssetPlus as its investment platform partner. When you choose to invest in mutual funds through CompoundX, account opening, KYC and transaction execution are processed through AssetPlus' platform, which connects to the asset management companies, registrars and other market infrastructure involved.
CompoundX provides the education, financial tools, goal planning and relationship management around those investments. CompoundX does not hold client money or mutual-fund units. [To be confirmed by Compliance]
Registration details for CompoundX and its partners, where applicable, are listed on our Disclosures page.
Risk disclosure
Market-linked investments involve risk, including the possible loss of the amount invested. Past performance does not indicate future results, and the value of investments and the income from them can go down as well as up.
Deposits, bonds and other fixed-income products carry credit, interest-rate and liquidity risks; returns depend on the issuer honouring its obligations. Insurance is a contract of protection, not an investment. Read every offer document, scheme information document and policy wording carefully before you decide.