Please suggest one Hybrid fund for Core MF Portfolio

Q & A Forum › Category: Investments › Please suggest one Hybrid fund for Core MF Portfolio

paiguruprasad87 asked 6 years ago

Hi sir, I need to replace my ELSS ABSL 96 Tax relief fund with hybrid funds as my tax requirement is fulfilled by ppf and don't take that much risk as I have already maintaining UTI index pair 70:30 ratio.My age is 31 years now. Suggest me one good hybrid fund, HDFC hybrid equity, Icici Equity and debt ,Icici balanced advantage fund Or Multi Cap like Parag Parikh long term equity fund ,Icici multi asset fund. Which suits my profile for long term goal (Retirement). Which one is better , UTI Twins Index funds or Single Hybrid Fund as a core portfolio????? I have already have asset allocation in place (60 Equity: 40 Debt) just need to replace ELSS fund sir. And for re-balancing I am using UTI Arbitrage fund in debt allocation along with PPF. Please suggest.

4 Answers

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Sreekanth Staff answered 6 years ago

Hi, Based on the given information, I believe that an equity hybrid fund makes sense to add to your MF portfolio. You may consider ICICI Equity & Debt fund. This is an equity hybrid fund with a conservative strategy. If you would like to add an hybrid fund with slightly higher risk profile then you can consider HDFC Equity Hybrid fund.

ICICI Pru Equity & Debt Fund has been a consistent performer with low volatility and has a good downside protection.
- Around 60% of fund’s equity allocation is in large-cap stocks.
- The Fund has 22.2% investment in Debt Securities.
HDFC Hybrid Fund has given the best returns in the last 10 years when compared to its peers in the above list.
- Around 43% of fund’s equity allocation is in large-cap stocks & the fund has been little aggressive with its allocation as it has invested 20% of its equity portfolio in Mid/Small cap stocks.
- The Fund has 27.8% investment in Debt of which 8.6% in Government securities, 18.35% of funds invested in very low risk securities..

paiguruprasad87 replied 6 years ago

Thanks a lot sir….
One more thing , Which one is better , UTI Twins Index funds or Single Hybrid Fund as a core portfolio?????

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Sreekanth Staff answered 6 years ago

Hi, You already have invested in UTI index funds. As there are passive ones there is no 'downside protection' management. So, advisable to include an aggressive equity fund to your core portfolio.

paiguruprasad87 replied 6 years ago

Thanks for the suggestion sir..
So as per suggestion 60% in Hybrid Fund as Core and 40% UTI Twins in Satellite ..

I have a confusion, instead of UTI Nifty 50 can I add Franklin Prima Fund in satellite sir????

How about International Exposure , Is it necessary?????

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Sreekanth Staff answered 6 years ago

Hi, You may go ahead with 60:40 combination. Do check your hybrid fund overlap % with index funds before taking a call. For example : The current overlap between HDFC Equity hybrid fund Vs UTI nifty index is around 45%, so no point in have two funds (hdfc hybrid and uti nifty) as part of your portfolio. Related article : Mutual Fund Portfolio Overlap Comparison Tools Franklin Prima Fund or a Fund like PPFAS LTE can be added as a satellite fund.

paiguruprasad87 replied 6 years ago

Thanks a lot sir….. How much Overlap is ok between two funds sir?????

Can we Trust PayTM Money or ET Money for MF investment or safe to go with AMC website itself????

Please suggest…..

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Sreekanth Staff answered 6 years ago

Hi, There is no thumb rule as such regarding overlap %. It is prudent to avoid funds with high overlap say >30%. The mentioned names are just 'execution platforms', your money will be with the AMCs (fund houses).

paiguruprasad87 replied 6 years ago

Thanks for suggestion sir….

Are you investing through execution platforms or Direct AMC ???????

Please reply…..

Sreekanth Staff replied 6 years ago

Hi..I primarily invest through icicidirect, fundsindia and direct AMC websites..