Best Hybrid Mutual Funds to Invest in India: Updated List (2026)

In India, when it comes to wealth generation, investors prefer Hybrid Mutual Funds because of the balanced approach to wealth generation. They reduce the risks and volatility through diversification by investing in more than one class of instruments, to offer the investors a steady flow of returns. 

With the progressing and changing market scenarios in 2026, hybrid mutual funds in India are a good choice for moderate risk investors since they would receive a steady investment. If you are a beginner to mutual fund investment in India or you are trying to modify or refine your portfolio, it would be a good idea to examine the best hybrid mutual funds and invest in them.

It will entail the types of hybrid funds and provide their advantages, some factors to consider when selecting the funds in previous years, as well as the most outstanding performers in those years.

What Are Hybrid Mutual Funds

The idea behind hybrid funds, or balanced mutual funds, is investing in more than one asset class (equities and debt). In a typical hybrid fund, the investment and portfolio of the fund would reflect growth and stability. For this category, they have a portfolio that reflects equity exposure to the market.

 

 

In India, SEBI divides hybrid funds into different categories:

• Aggressive Hybrid Funds (equity 65-80%). 
• Conservative Hybrid Funds (equity 10-25%). 
• Balanced Advantage Funds (dynamic allocation). 
• Multi-Asset Allocation Funds (more than three asset classes). 
• Arbitrage Funds (equity-like taxation, low-risk). 

These options fit different risk categories and make hybrid mutual funds in India great for long-term goals, such as retirement, educating children, or wealth building.  

The graph shows how inflows into hybrid funds have frequently exceeded inflows into equity funds. This further demonstrates how popular hybrid funds have become amongst Indian investors. 

Advantages of Hybrid Fund Investment

In the current economic context, hybrid funds have several advantages. 

1.  Diversification: Investing across equity and debt lowers overall risk. 

2. Risk Mitigation: The debt component of the fund cushions losses from equity. The equity component provides the potential for asymmetric upside. 

3. Tax Efficiency: Equity-oriented hybrids (65%+ equity) qualify investors for long-term capital gains tax benefits. 

4. Professional Asset Management: Fund managers conduct the asset allocation and balance the fund, which saves time for investors.

5. Moderate Risk Investing: These funds are ideal for investors looking for better returns than pure debt funds but with lower volatility than pure equity. 

In 2026, with expected fluctuations in the market, hybrid funds in 2026 will be a great way to participate in market growth and preserve capital. As depicted in this performance comparison, aggressive hybrid funds have provided strong returns over the long term, with less risk than pure equity indices, historically. 

Categories of Hybrid Mutual Funds in India

Every category can be understood to determine the best choice for you:  

• Aggressive Hybrid Funds: For growth-oriented investors with a higher equity allocation.  
• Conservative Hybrid Funds: More debt for capital preservation with an added equity upside.  
• Balanced Advantage Funds (Dynamic Asset Allocation): Funds that adjust their equity-debt allocation based on market valuations.  
• Multi-Asset Funds: Funds that invest in equities, debt, gold, and other assets for higher diversification.  

These funds cater to different horizons and risk appetites in mutual fund investment India.  

Things to Look for in your Hybrid Mutual Fund Selection

Choosing the right fund can be difficult, but the following parameters should make it easier:  

• Performance Track Record: Consider the returns of the fund over the last 3-5 years. Short-term returns do not matter.  
• AUM (Assets Under Management): Greater AUM usually indicates higher trust from investors.  
• Expense Ratio: A lower ratio means higher net returns.  
• Fund Manager Experience: A fund with the same fund manager for a long duration and a better performance is a plus.  
• Risk-Return Profile: Make it better aligned with your goals and your risk appetite.  
• Consistency: Analyse how the fund returns are rolling on average over time. Also, check how the fund performs when it is falling to evaluate the risk.  

Before you consider investing, be sure to check the recent NAV, the Value Research or Morningstar rating of the fund, and seek the opinion of an advisor.  

 

 

Best Hybrid Mutual Funds in India for 2026

Here are quality hybrid mutual funds as of early 2026. These funds have been analysed based on their recent performance, AUM, and expert opinions. Past performance is not an indicator of future performance.  

1. HDFC Balanced Advantage Fund  

With one of the highest AUMs in the industry, HDFC is one of the largest and most recognised balanced mutual funds. HDFC is a dynamic allocation fund that adjusts your equity exposure based on market performance. HDFC is an excellent choice for fund investors who want stability with long-term AUM (over ₹1 lakh crore) and strong long-term performance.  

2. ICICI Prudential Equity & Debt Fund  

ICICI is recognised as a front-runner among aggressive hybrid funds. Investors in the hybrid mutual funds India space should consider the ICICI Prudential fund, which has a 65-80% allocation in equities and has been successful in producing returns even as investor risk has been moderated.  

3. SBI Equity Hybrid Fund  

In the category of Equity Hybrid funds, SBI has one of the highest AUMs at ₹80,000+ crores. SBI is often recognised as one of the most equity-balanced funds.  

4. SBI Balanced Advantage Fund  

With over 1 glorious year of outstanding returns, SBI has driven Balanced Advantage Mutual Funds into the modern era, adapting to the currents of the financial market using the balanced fund model.  

5. ICICI Prudential Balanced Advantage Fund  

Another leader for consistent performance and large AUM. Suitable for automatic rebalancing investors.  

6. Quant Multi Asset Allocation Fund  

Leading the multi-asset category with high 3-year returns of around 23% p.a. as per the latest data. It has the most resilient equity, debt and commodities diversification.  

7. Canara Robeco Equity Hybrid Fund  

Identified for consistent performance in the aggressive hybrid space with decent downside coverage.  

8. Mirae Asset Aggressive Hybrid Fund  

A strong contender with decent returns and a focus on good quality stocks. These funds are highly rated by the likes of ET Money, Economic Times, etc., for 2026. The table compares conservative hybrid funds with different debt categories, showing where hybrids can perform better in certain conditions. 

How to Invest in Hybrid Mutual Funds  

Start with a Systematic Investment Plan (SIP) for rupee-cost averaging. Investing is hassle-free with Groww, ET Money, and most direct AMC sites. Invest a little to start, and increase your investments over time. Do a review once a year.

 

 

Conclusion

In mutual fund investment in India, hybrid mutual funds become a primary investment option for almost all investors due to their strong risk-reward balancing capability. In 2026, hybrid mutual funds such as HDFC Balanced Advantage Fund, ICICI Prudential Funds, and Quant Multi Asset will be some of the best hybrid mutual funds to invest in.

Investments are subject to market risks. Ensure to consult the scheme documents, evaluate your finances, and seek professional help. Keep your investments diversified, invest for the long term, and let compounding do its work.

DISCLAIMER: This blog is NOT any buy or sell recommendation. No investment or trading advice is given. The content is purely for educational and information purposes only. Always consult your eligible financial advisor for investment-related decisions.