Hybrid Mutual Funds: SBI, HDFC, ICICI hybrid funds lead in 2025 as investors seek growth with stability

Investing is much like balancing your diet — you need the right mix of nutrition and flavour. Similarly, investors often seek a balance between growth and stability, and that’s precisely where Hybrid Mutual Funds come in. These funds invest across multiple asset classes — primarily equity (stocks) and debt (bonds) — to offer the dual advantage of capital appreciation and income stability.

Ideal for investors with a moderate risk appetite, hybrid funds offer diversification within a single product, making them one of the most popular choices among long-term investors. Through Systematic Investment Plans (SIPs), investors can participate gradually in the market while benefiting from the fund’s built-in asset allocation and periodic rebalancing.

How hybrid mutual funds work

Hybrid funds operate based on either fixed or dynamic asset allocation strategies, managed by professional fund managers. The equity portion drives capital growth, while the debt portion cushions volatility and provides regular income. Many dynamic funds automatically rebalance their portfolios depending on market conditions, ensuring investors don’t have to monitor or adjust their exposure frequently.

They are categorised into different types based on their allocation and risk profile — Conservative Hybrid Funds (low risk, higher debt allocation), Balanced and Aggressive Hybrid Funds (moderate to moderately high risk), Dynamic Asset Allocation or Balanced Advantage Funds (flexible equity-debt mix), and Multi-Asset Funds (equity, debt, gold, or other commodities).

Top Hybrid Mutual Funds in 2025

According to Equitymaster’s analysis, the SBI Equity Hybrid Fund is one of India’s most established hybrid mutual fund schemes. Over nearly three decades, it has built a reputation for consistency and stability across market cycles, offering investors a blend of equity growth and debt safety within a single portfolio.

1. SBI Equity Hybrid Fund

Launched in October 1995, the SBI Equity Hybrid Fund is among India’s oldest and most trusted hybrid schemes. The fund aims to generate long-term capital appreciation while maintaining portfolio stability by investing across equity, debt, and money market instruments.

Asset Allocation:

Equity: 65–80%

Debt & Money Market Instruments: 20–35%

REITs/InvITs: Up to 10%

As of September 30, 2025, the fund’s AUM stood at Rs 790.6 billion, with nearly 57% in equities and the rest in fixed income. The fund’s major sectoral exposure includes financial services (29%), sovereign securities (10.6%), services (8.4%), and power (7%).

Top holdings include HDFC Bank, Bharti Airtel, SBI, and ICICI Bank. On the debt side, it invests in high-rated securities from PFC, NABARD, and LIC Housing Finance.

Performance:

Over five years, the fund delivered a 16.64% CAGR, outperforming its benchmark CRISIL Hybrid 35+65 – Aggressive Index (15.21%). A Rs 10,000 investment grew to Rs 21,596 during this period.

2. HDFC Balanced Advantage Fund

Launched in February 1994, the HDFC Balanced Advantage Fund (formerly HDFC Prudence Fund) adopts a dynamic allocation strategy between equity and debt, driven by valuation models and macroeconomic indicators.

As of September 2025, it maintained unhedged equity exposure of 62.4% and hedged equity of 4.4%. The debt portion consists of G-Secs, corporate bonds, and SDLs with an average maturity of 7.65 years.

The fund’s large-cap exposure stands at 81%, with the rest spread across mid- and small-cap stocks. This diversified mix allows investors to benefit from equity market rallies while reducing volatility.

Performance:

The fund recorded a stellar 24.22% CAGR over five years, far ahead of its benchmark Nifty 50 Hybrid Composite Debt 50:50 Index (12.35%). A Rs 10,000 investment grew to Rs 29,596, reflecting strong long-term performance.

3. ICICI Prudential Multi-Asset Fund

Launched in October 2002, the ICICI Prudential Multi-Asset Fund stands out for its multi-asset diversification, investing across equity, debt, gold, silver, REITs, and InvITs. The fund ensures that at least 10% of assets remain in three or more asset classes at all times.

As of September 2025, its AUM stood at Rs 680 billion. The fund’s equity allocation was 66.7%, debt 24.5%, and commodities (including gold/silver ETFs and derivatives) 5.7%. Top holdings include ICICI Bank, Infosys, Axis Bank, L&T, and Maruti Suzuki.

Performance:

Over five years, the fund has delivered an impressive 24.88% CAGR, outperforming its benchmark (16.28% CAGR). A Rs 10,000 investment would now be worth Rs 30,395, making it one of the best-performing hybrid schemes in 2025.

Which hybrid fund should you get?

Each hybrid fund employs a distinct strategy to balance risk and reward. The SBI Equity Hybrid Fund is ideal for investors seeking stability with consistent long-term returns. The HDFC Balanced Advantage Fund suits those who prefer dynamic asset allocation and lower volatility. Meanwhile, the ICICI Prudential Multi-Asset Fund is best for investors looking for diversified exposure across multiple asset classes, including commodities.

However, investors should note that hybrid funds still carry market and interest rate risks, which can affect short-term returns. The ideal fund depends on one’s risk tolerance, investment horizon, and financial goals.

For investors

Hybrid Mutual Funds represent the middle ground of investing — offering the growth potential of equities and the safety net of debt. With automatic rebalancing, professional management, and diversification, they simplify investing for those seeking stability without sacrificing growth.

For investors building wealth through SIPs or seeking all-weather portfolios, hybrid funds remain a compelling choice in 2025 — a balanced recipe for financial fitness in an unpredictable market.