Open DBS Treasures Account
Conservative Hybrid Mutual Funds are usually for investors who prefer stable returns with limited exposure to market fluctuations. This type of mutual fund can be beneficial if you have any financial goal or want to explore something different than the traditional investment options.
Read on to learn more about Conservative Hybrid Mutual Funds, their benefits, and whether they suit your investment goals.
Conservative Hybrid Mutual Funds are part of the hybrid mutual funds. These types of funds mostly invest in fixed income debt securities, which ensures that investments made by investors are stable and lower risk than other investments.
This fund is ideal for beginners who want to diversify their portfolio or for those looking to preserve wealth while benefiting from market returns.
As per SEBI norms, Conservative Hybrid Funds invest 10% to 25% in equity and equity related instruments, the rest 75% to 90% is invested in Debt instruments. A debt mutual fund makes up the majority of this allocation, providing stability and lower risk.
As the name suggests, these funds are meant for investors with a conservative risk profile. Read on to know more about the key benefits of this mutual fund.
For many low and high-risk investors, investing in Conservative Mutual Funds is a strategic decision due to its benefits such as:
When compared to traditional investments such as fixed deposits, recurring deposits and government saving schemes, Conservative Hybrid Mutual Funds combine debt funds with limited equity exposure, which can yield better returns while keeping risk to a minimum.
The focus of a Conservative Hybrid Mutual Fund is to be a safer investment when compared to equity funds or other aggressive hybrid mutual fund options.
Conservative Hybrid Mutual Funds offer diversified investment options as these funds invest in both debt and equity securities. This strategic allocation can help investors preserve their wealth in various financial conditions and enjoy the growth opportunities.
Conservative hybrid mutual funds are suitable for medium to long-term investment horizon. This type of mutual fund would be ideal for investors such as:
Investors who are starting to invest in mutual funds, or looking to diversify from traditional investment opportunities such as fixed deposits, will find Conservative Hybrid Funds a safer option to invest their funds in.
If you are looking to invest for the long term, then investing in this type of mutual fund could be beneficial. A Conservative Hybrid Mutual Fund focuses on a steady growth of investment which is why it invests primarily in debt and fixed income instruments.
Investors looking for inflation-beating financial options can consider investing in a Conservative Hybrid Fund. These mutual funds deliver an average return of 10 to 12% which is more than traditional FDs.
It should also be noted that though Conservative Hybrid Funds invest in low-risk securities, they do have some exposure to market through equity investments.
Now that we have covered the meaning, functions, and suitability of Conservative Hybrid Funds, here are a few things to consider before investing:
These mutual fund schemes are meant for short to medium-term financial goals, typically over a period of three to five years. It can also be ideal for planning for retirement, child’s education or a family event.
This type of mutual fund doesn’t get affected by the sharp ups and downs seen in equity-only fund schemes. Because its fixed income securities provide a steady and predictable return.
When comparing options, focus on funds with a low expense ratio, as this helps you keep more of the returns.
Take a look at the performance history of the mutual funds, as this can give an idea of how the fund will perform in the future.
When investing in Conservative Hybrid Mutual Funds, it’s important to know how your returns are taxed. To understand the tax rules for this mutual fund scheme, refer to the table below:
Tax Type
Taxation Details
Short-Term Capital Gains (STCG)
Taxed according to income tax slab rate (if sold within 3 years)
Long-Term Capital Gains (LTCG)
20% tax with indexation benefit (if held for more than 3 years)
Dividend Income
Taxed as per income tax slab rate for dividends received.
TDS on Dividends
10% TDS if dividends exceed ₹10,000 in a financial year (as per Budget 2025).
If you are considering investing in Conservative Hybrid Mutual Funds, follow these simple steps to get started:
If you hold a DBS Treasures Premium Savings Account, you can access curated mutual fund options and investment guidance from experts to ensure you are on the right path for your personal finances.
When choosing between aggressive and Conservative Hybrid Mutual Funds, it’s essential to understand the key differences. Here’s a comparison to help you decide which type aligns best with your investment goals:
Aspect
Aggressive Funds
Conservative Funds
Risk Level
High – Higher equity exposure, more market volatility
Low to Moderate – Mostly debt, limited equity
Returns Potential
Higher – Aimed at long-term capital growth
Moderate – Focused on stable income and capital safety
Ideal Investment Term
5+ years
3–5 years
Investor Profile
Comfortable with risk and market swings
Prefers stability with modest returns
Investors who are exploring different types of mutual funds to begin their investing journey, may find Conservative Hybrid Mutual Funds to be a safer choice. This mutual fund scheme is also good for investors who want to have a stable instrument in their investment portfolio.
It’s important to make sure that your investments are made after due diligence and research. Consider services like the wealth management from DBS Treasures that is supported by a team of wealth professionals who can support your daily banking and investment needs. For NRIs, pairing investments with an NRI Savings Account enables smooth banking, efficient fund management, and convenient access to global investment avenues.
Disclaimer: Investment in mutual funds is subject to market risks. It's advisable to read all scheme-related documents carefully and consult with financial advisors before making investment decisions.
