About Balanced Hybrid Funds
Balanced Hybrid Funds are a category of hybrid mutual funds that invest in both equity and debt securities. Under the Securities and Exchange Board of India (SEBI) classification, these funds generally invest between 40% and 60% of their assets in equity and equity-related instruments, while the remaining 40% to 60% is invested in debt instruments. They are not permitted to use arbitrage to meet the equity allocation requirement.
The combination of equity and debt helps these funds strike a balance between capital appreciation and income generation. The equity portion aims to deliver long-term growth, whereas the debt component helps reduce overall portfolio volatility and provides relatively stable returns.
Balanced Hybrid Funds are suitable for investors who want moderate risk exposure without investing entirely in equities. They can also serve as a good entry point for first-time mutual fund investors looking for a diversified investment option.
Since market conditions change over time, fund managers actively rebalance the portfolio to maintain the desired asset allocation. This helps ensure that the fund remains aligned with its investment objective while managing market risks effectively.
How Do Balanced Hybrid Funds Work?
Balanced Hybrid Funds invest simultaneously in equity and debt instruments to create a diversified portfolio. The fund manager allocates investments based on the fund's mandate while considering prevailing market conditions, interest rates, and economic trends.
The equity portion is invested in shares of listed companies to generate long-term capital appreciation. At the same time, the debt allocation includes instruments such as government securities, corporate bonds, treasury bills, and money market instruments, which help provide stability to the portfolio.
As markets fluctuate, the fund manager periodically rebalances the portfolio to maintain the prescribed allocation between equity and debt. For example, if equity markets perform exceptionally well and increase the equity allocation beyond the permitted range, the manager may shift some investments into debt to restore balance.
Investors can invest through a lump sum amount or via a Systematic Investment Plan (SIP). The returns depend on the performance of both the equity and debt segments, making these funds generally less volatile than pure equity funds while offering higher growth potential than debt-only funds.
Top 5 Balanced Hybrid Funds
| Name | AUM | Expense Ratio | Alpha | Sharpe Ratio | PE Ratio |
| Altiva Hybrid Long-Short Fund | 5,544.97 | 1.46 | 4.37 | 2.42 | 19.13 |
| Magnum Hybrid Long Short Fund | 3,646.60 | 1.32 | 2.24 | 0.68 | 21.55 |
| iSIF Hybrid Long-Short Fund | 927.35 | 1.22 | 8.58 | 0.57 | 26.44 |
| 360 ONE Balanced Hybrid Fund | 743.03 | 0.63 | 2.03 | 0.35 | 28.65 |
| RedHex Hybrid Long-Short Fund | 581.13 | 0.45 | 2 | 4.14 | 16.46 |
Note: Data as of July 23, 2026
Altiva Hybrid Long-Short Fund
Altiva Hybrid Long-Short Fund is a Specialised Investment Fund (SIF) that aims to generate capital appreciation and regular income through a combination of equity, derivatives, arbitrage strategies and fixed-income investments. It is offered by Edelweiss Mutual Fund and was launched on October 20, 2025.
The fund follows a hybrid long-short strategy that seeks to generate relatively stable returns across different market conditions while managing risk. The fund is managed by Bhavesh Jain, Bharat Lahoti, Dhawal Dalal, Kedar Karnik and Amit Vora.
Magnum Hybrid Long Short Fund
Magnum Hybrid Long Short Fund is a Specialised Investment Fund (SIF) that aims to generate regular income and long-term capital appreciation through investments in equity, debt, derivatives and arbitrage opportunities. It is offered by SBI Mutual Fund and was launched on October 23, 2025.
The fund follows a hybrid long-short strategy designed to balance growth potential with risk management across market cycles. The fund is managed by Gaurav Mehta.
iSIF Hybrid Long-Short Fund
iSIF Hybrid Long-Short Fund is a Specialised Investment Fund (SIF) that seeks to generate long-term capital appreciation through investments in equity, debt and derivative-based strategies. It is offered by ICICI Prudential Mutual Fund and was launched in February 2026.
The fund follows a diversified hybrid long-short investment approach aimed at managing volatility while pursuing consistent returns. The fund managers are ICICI Prudential Mutual Fund's designated investment team for the scheme.
360 ONE Balanced Hybrid Fund
360 ONE Balanced Hybrid Fund is an open-ended balanced hybrid mutual fund that aims to provide long-term capital appreciation along with regular income by investing in equity and debt instruments. It is offered by 360 ONE Mutual Fund and was launched on September 25, 2023.
The fund maintains a balanced allocation between equity and fixed-income securities to provide growth with relatively lower volatility. The fund is managed by Mayur Patel and Ashish Ongari.
RedHex Hybrid Long-Short Fund
RedHex Hybrid Long-Short Fund is a Specialised Investment Fund (SIF) that seeks to generate capital appreciation and regular income through a combination of equity, fixed-income and derivative-based investments. It is offered by HSBC Mutual Fund and was launched in 2026.
The fund follows a hybrid long-short strategy with exposure to equity, debt, arbitrage opportunities, REITs and InvITs to deliver risk-adjusted returns. The fund is managed by HSBC Mutual Fund's designated investment team for the scheme.
Advantages of Balanced Hybrid Funds
Balanced Hybrid Funds offer several benefits for investors seeking a balanced investment approach.
- Diversification: These funds invest across equity and debt, helping reduce concentration risk.
- Lower volatility: The debt allocation helps cushion the impact of sharp equity market fluctuations.
- Growth potential: Equity investments provide an opportunity for long-term capital appreciation.
- Professional management: Experienced fund managers actively manage and rebalance the portfolio.
- Convenient investing: Investors gain exposure to multiple asset classes through a single investment.
- Suitable for moderate-risk investors: They provide a middle ground between pure equity and pure debt funds.
- Flexible investment options: Investors can choose between lump sum investments and SIPs.
- Disciplined asset allocation: Regular portfolio rebalancing helps maintain the intended risk profile.
Factors To Consider Before Investing in Balanced Hybrid Funds
Before investing in Balanced Hybrid Funds, it is important to evaluate whether they align with your financial goals and risk appetite.
Consider your investment horizon, as these funds generally work better for medium- to long-term financial objectives. Review the fund's historical performance over different market cycles instead of relying only on short-term returns.
You should also compare the fund's expense ratio, portfolio quality, asset allocation strategy, and fund manager's experience. While past performance does not guarantee future returns, it can provide insights into how the fund has managed different market conditions.
Additionally, understand the exit load, taxation, and the level of risk associated with the fund. Reading the Scheme Information Document (SID) and Key Information Memorandum (KIM) can help you make a more informed investment decision.
Who Should Invest in Balanced Hybrid Funds?
Balanced Hybrid Funds may be suitable for investors who seek a balance between capital growth and relatively stable returns. They are ideal for individuals who are comfortable with moderate market risk but do not want to invest entirely in equity funds.
These funds can be appropriate for first-time mutual fund investors, long-term wealth builders, and individuals saving for goals such as higher education, buying a home, or retirement. Investors looking for a diversified portfolio through a single investment may also find these funds beneficial.
However, every investment should match your financial objectives, investment horizon, and risk tolerance. It is advisable to assess your financial situation before investing.
Why Invest with Angel One?
Angel One provides a simple and convenient platform for investing in mutual funds. Investors can explore a wide range of Balanced Hybrid Funds, compare schemes, and invest digitally through a seamless process.
The platform offers detailed fund information, performance data, risk indicators, and research-backed insights to help investors make informed decisions. You can start investing with a lump sum or SIP based on your financial goals.
With a user-friendly interface, paperless account opening, and easy portfolio tracking, Angel One helps investors manage their mutual fund investments efficiently. Regular monitoring tools and investment resources further support better financial planning.
Taxability of Balanced Hybrid Funds
The taxation of Balanced Hybrid Funds depends on their equity allocation and the applicable tax regulations. Funds are taxed according to the provisions applicable to their classification under prevailing income tax laws.
Capital gains tax may differ depending on whether the gains are short term or long term and on the fund's tax classification. Dividend income, if distributed, is also taxed according to the investor's applicable income tax slab.
Since tax rules may change from time to time, investors should refer to the latest income tax provisions or consult a qualified tax adviser before making investment decisions.
How to Invest in Balanced Hybrid Funds?
Investing in Balanced Hybrid Funds is a straightforward process.
- Open a demat and investment account with Angel One.
- Complete the KYC verification process.
- Search for the Balanced Hybrid Fund you wish to invest in.
- Compare its performance, expense ratio, risk level, and investment objective.
- Choose between a lump sum investment or SIP.
- Confirm your investment and monitor your portfolio regularly through the Angel One platform.
