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Best Direct Plans in Hybrid Mutual Funds

Updated on September 27, 2023 , 825 views

Direct plans are gaining a huge popularity amongst new investors due to its unique features and benefits. Direct plans and regular plans, are not a different scheme, in fact, they are a variant of a mutual fund scheme. While regular plans have been in the option for many years, the first direct plan got introduced in the year 2013.

Investors who want to invest in a hybrid fund by opting direct plans, here’s a glimpse of what are direct funds, a brief understanding of hybrid funds, along with some of the best direct pans hybrid funds.


Why Direct Plans are Gaining Popularity?

Unlike regular funds, direct funds are available through limited channels like from a mutual fund company, RTAs such as Karvy/CAMS, limited third party securities intermediaries, and authorized local representatives of the fund house. Investors who can independently invest and track their investments without a help of an advisor or a mediator can invest in direct plans from the fund house.

In direct funds, there are no expense charges like regular funds. As there are no distributor charges/ transaction chargers, etc., the expense ratio of direct plans is less. This effect on returns too. As the expense ratio of a direct mutual fund is less, the returns it can be slightly higher than regular plans- about 0.5 percent to 1.5 percent higher. This is one of the reasons why investors are opting for direct funds.

Ideally, an investor who has an experience of mutual fund investment and a fair knowledge about Market movements should prefer for direct plans. Moreover, experienced who don’t need any advice over investment or can manage their direct mutual fund investments alone can opt for this option.

Understanding Hybrid Mutual Funds

Hybrid Funds, also known as Balanced Fund, are a type of Mutual Funds that act as a combination of equity and Debt fund. These funds allow an investor to invest in both equity and debt markets in certain proportions. The proportion of mutual fund investment in these funds is either pre-determined or may vary over a period of time.

  • Hybrid mutual funds are one of the Best Investment Plan as they not only allow investors to enjoy Capital growth, but also get fixed Income at regular intervals.

  • Balanced funds are less volatile. They offer the best of both equity and debt funds ensuring higher return through equity component and stability through the debt component.

  • These funds help in balancing the Portfolio. As the fund invests in both stocks and Bonds, investors can easily create a balanced portfolio by Investing in a balanced mutual fund.

  • Hybrid funds also provides diversification benefits. Diversification helps in generating stable returns; so that if one fund underperforms, others can stabilise the portfolio. This will reduce the overall risk of the portfolio.

Ideally, hybrid funds can be a good investment option for investors who want to invest in Mutual Funds. These funds have the best of both worlds: the advantages of equities while gaining the benefits of a Fixed Income investment. Thus, investors can choose the above listed best hybrid mutual funds and earn good profits by investing in the scheme.

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Best Direct Plans in Hybrid Funds or Balanced Funds

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All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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