Best Groww Hybrid Mutual Funds

Indiabulls Mutual Fund is a SEBI-registered AMC that started its journey on 24 March 2011. This AMC runs under the sponsorship of Indiabulls Housing Finance Limited with its trustee, Indiabulls Trustee Company Ltd. They manage an AUM portfolio of approximately Rs.663.68 crore till 31 March 2021. 

This AMC caters to a large consumer base of more than 92 lakhs across states. Their diverse product range includes schemes that allow investors to allocate their resources for higher returns. Investors can choose from more than 10 mutual funds schemes, including the best Indiabulls hybrid mutual funds. 

Hybrid mutual funds facilitate asset allotment in more than one fund category, usually equity and debt. Hybrid mutual funds can be categorised as equity-oriented or debt-oriented mutual funds depending on the percentage of allotment. 

As per SEBI, an equity-oriented scheme must invest at least 65% in stocks or related instruments. Similarly, debt-oriented schemes must invest predominantly in debt securities and related funds. 

Indiabulls Mutual Fund offers more than 3 hybrid mutual fund schemes. Two of the best Indiabulls hybrid mutual funds 2023 are equity-based, while one is debt-based. 

After developing an overall idea about hybrid mutual funds, the taxability of this instrument is also important. Funds are usually taxed premised on whether it’s a long-term gain or a short-term one. 

The threshold based on which long-term and short-term capital gains are categorised is 1 year and 3 years for equity- and debt-based funds, respectively.

Taxability

Long-term Capital Gains Tax: An equity-based hybrid mutual fund is taxed as a pure equity scheme. For long-term capital gains tax or LTCG, if the return exceeds Rs.1 lakh, a 10% tax is levied on the excess sum. Similarly, the LTCGT set on debt-based schemes is 20% with indexation and 10% without this benefit. 

Short-term Capital Gains Tax: Investors need to pay 15% tax on STCG released from the sale of equity-based fund units. However, the STCG will be added to an investor’s taxable income for debt-oriented funds and taxed per his/her applicable slab rate.

TDS: Dividends earned from an equity-based fund exceeding Rs.5000 is liable for 10% TDS. 

Factors to Consider Before Investing

Apart from taxability, investors also need to note other pointers to choose the best Indiabulls hybrid mutual funds. Check out the pointers below. 

Investment objective: The primary key to choosing the best Indiabulls hybrid mutual fund is deciding the financial goal, time horizon, and calculating expected returns. An equity-oriented hybrid mutual fund is more aggressive in terms of generating returns in a favourable market. However, a debt-oriented hybrid mutual fund ensures better stability in a volatile market. Hence, it is imperative to assess your unique needs before investing. 

Risk appetite: Traditionally, equity-oriented hybrid funds are riskier than debt-oriented hybrid funds. The performance of these funds depends on market volatility, interest rates, inflation, etc. However, to strike a balance between investment and return, investors need to assess their risk tolerance as it varies from person to person. 

Past performance of a fund: Since the returns on mutual fund investments are not absolute and vary with market conditions, proper research is necessary. Among others, the past performance of top Indiabulls hybrid mutual funds is one of the simplest ways to get an insight into a scheme’s competence in generating returns to date. But it does not definitively provide an idea of how much return one can expect from a particular scheme.

Holding analysis: The whole purpose of allocating assets is to minimise the risk factor and maximise returns. For hybrid mutual funds, the allotment helps determine the orientation of the fund. For instance, Indiabulls offer equity hybrid mutual funds wherein 65% to 80% of net assets go towards equity and related securities. The rest goes towards debt, cash, money market and similar instruments. Conversely, a debt-based hybrid fund invests in corporate bonds, government securities, commercial papers, etc. Hence, the holding analysis is crucial to make a suitable investment. 

Experience of the fund manager: Managing a hybrid mutual fund is not easy. Only a professional and experienced fund manager can mix the equity-debt components in a way so that investors get the best possible returns, irrespective of the market conditions. Hence, a fund manager with a great track record can maximise the benefit of investing in the best Indiabulls hybrid mutual funds. 

Expense ratio: Select fund houses charge investors annual fees, covering the expenses of operating schemes. It includes allocations charges, marketing expenses, costs of employing fund managers, etc. Since the expense ratio is applicable to the generated returns, comparing it is essential to increase the chances of higher returns. 

Moreover, the best Indiabulls hybrid mutual funds are available both as direct and regular plans. The expense ratio is lower for direct plans than its counterpart. 

Exit load: AMCs charge an exit load if you withdraw or sell the mutual funds partially or fully before a pre-specified period. It ensures you sustain your investment for at least the lock-in period and discourages premature withdrawal. However, some schemes might not involve an exit load.

The pointers mentioned above are fundamentals of selecting the best Indiabulls hybrid mutual funds. Consider them to make an informed investment decision.