About HDFC Hybrid Equity Funds
HDFC Hybrid Equity Fund is a high-risk investment product with the portfolio investing 65 to 80 percent equity and equity related instruments. Within equities, the fund maintains a judicious mix of large cap (70%-90%), mid cap (5%-20%) & small cap (5%-20%). The HDFC scheme aim of the fund is to maintain a reasonably diversified portfolio at all times and build a portfolio of companies across market capitalization which have sound financial strength, sustainable business models, acceptable valuations that offer potential for capital appreciation and reasonable growth prospects.
About HDFC Hybrid Debt Funds
HDFC Hybrid Debt Fund is a moderately high risk investment product and 75 to 90 percent of the portfolio is invested in debt and money market instruments. The investment in debt securities is guided by liquidity, interest rate and credit quality and the fund has the flexibility to invest in the entire range of debt securities including securitised debt. The remaining investment is made in equity and that part of the investing aims to build a portfolio of companies diversified across major industries, economic sectors and market capitalization, offering an acceptable risk reward balance.
HDFC Hybrid Fund Investment Objective
The investment objectives of HDFC Hybrid Equity Fund and HDFC Hybrid Debt Fund is to offer long-term capital appreciation and income. While there is no assurance that the Funds will achieve their investment objective, the HDFC Hybrid Equity Fund has offered 22.09 percent returns over the last 5 years and 7.87 percent returns in the past one year. The HDFC Hybrid Debt Fund has offered 13.09 percent returns over the past 5 years and 8.58 percent in the past one year. These funds have performed slightly better than the benchmark returns.
Risks Involved in HDFC Hybrid Funds
The risks specific to HDFC Hybrid Funds are that equity and equity related instruments are volatile and prone to price fluctuations on a daily basis. Also, the securities not quoted on the stock exchanges are inherently illiquid in nature and the ability to sell the securities which are listed on the stock market are also limited. Another risk arises from the extent of investment in Debt and Money Market instruments as they are affected by changes in the general level of interest rates while money market instruments involve credit risk and lack a secondary market which may cause liquidity issues.
Return Potential in HDFC Hybrid Funds
HDFC MF Hybrid Funds have offered slightly better returns than the benchmark returns. The HDFC Hybrid Equity Fund has offered 7.87 percent (benchmark returns 7.53%) in the last one year, 12.68 percent (benchmark returns 10.20%) in the last three years, 22.09 percent (benchmark returns 17.90%) in the last five years. The HDFC Hybrid Debt Fund has offered 8.58 percent (benchmark returns 8.44 %) in the last one year, 10.76 percent (benchmark returns 7.68%) in the last three years, and 13.09 percent (benchmark returns 9.43%) in the last five years. The past performances are, however, no guarantee for future returns.
Who Should Invest in HDFC Hybrid Funds?
HDFC Hybrid Funds are suitable for those investors who seek long-term capital appreciation and income. The funds come with a degree of risk and investors should not invest in the scheme unless they can afford to take the risks. Also, an investor should consult their financial advisor to ascertain whether the scheme is suitable to their risk profile.
