In this article, you will learn about 3 mutual funds in which you will get the benefit of both debt security and equity growth.
In the past, people used to invest in fixed deposits and Kisan Vikas Patra because they were considered better in terms of security and savings. But gradually, people’s inclination from FDs and Kisan Vikas Patra is shifting towards mutual funds. This is because earlier, FDs used to offer good interest rates, which have now reduced to 6% to 7%. And if we look at the inflation rate, it is increasing by about 6% per year. In this regard, if we see, we are not able to beat the inflation rate with fixed deposits.
Since the digital revolution has come to India, many investment apps have emerged in India, making it much easier to invest in mutual funds and stocks. However, investing in both mutual funds and stocks is quite risky, and perhaps that is why many people still hesitate to invest in them.
Mutual funds come in various types such as:
- Large Cap
- Mid Cap
- Small Cap
- Flexi Cap
- Hybrid
- Index Funds
- Debt Funds
- Liquid Funds
- Debt Hybrid
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Apart from the funds mentioned above, there are many other mutual funds, each with its own advantages and disadvantages. However, today we will only talk about debt hybrid funds.
Those who have been investing in mutual funds already know that mutual funds invest the majority of their assets in equities, which is quite risky because their price fluctuates according to the stock market. Since this involves more risk, the benefit is also quite high.
So, we have found 3 mutual funds for you that invest most of their assets in debt and a small portion in equity. The benefit of this is that most of your invested money goes into debt funds, which are quite safe compared to equity, providing stability to your money, while a small portion invested in equity provides growth to your money.
So let’s find out which mutual funds invest most of their assets in debt funds and the rest in equity.
1) Kotak Debt Hybrid Fund Direct Growth
Kotak Debt Hybrid Fund is a five-star mutual fund with a fund size of ₹2249.29 crore as of February 20, 2024. This fund invests 70.3% in debt, 25% in equity, and 4.7% in cash. Since 70% of its assets are invested in debt, you pay tax on your income according to your income tax slab instead of capital gains tax. This fund has given a return of 18% in the last one year, 12.03% in three years, and 13.42% in five years, which is quite good.
2) HDFC Hybrid Debt Fund Direct Growth
HDFC Hybrid Debt Fund is a four-star mutual fund with a fund size of ₹3054.71 crore. This fund was established on December 10, 1999. This fund invests 69.6% in debt, 23.5% in equity, and 6.3% in cash. Here too, you do not have to pay capital gains tax on profits, but you have to pay tax according to your income tax slab. This fund has given a return of 17.2% in the last one year, 11.5% in three years, and 11.4% in five years, which is the best after Kotak Mutual Fund.
3) SBI Conservative Hybrid Fund Direct Growth
SBI Conservative Hybrid Fund is a five-star mutual fund with a fund size of ₹9481.73 crore. This fund was established on June 29, 1987. SBI Conservative Mutual Fund invests 70% of its money in debt, 22.9% in equity, and 6.4% in cash.
And here too, you have to pay tax according to the income tax slab, just like the above funds. This fund has given a return of 14.5% in the last one year, 10.6% in three years, and 11.5% in last five years, which is quite good compared to fixed deposits.
Investing in these debt-targeted funds not only keeps your money a little safer but also, due to the small investment in equity, your money grows faster compared to fixed deposits.
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