SBI Conservative Hybrid Fund

SBI Conservative Hybrid Fund is also known as SBI Debt Hybrid Fund. This fund is an open-ended hybrid scheme that offers investors the flexibility to invest in debts, money market instruments, and the equity market. Macro-economic factors, market dynamics, etc., decide investors' portfolio composition to maximize investment profit.

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With these funds, the fund manager must invest at least 75% of total assets in fixed income securities like government securities, bonds, etc. While the remaining 25%, he/she needs to invest in equity or equity-related instruments.

SBI Debt Hybrid Fund Facts

The following table shows some of the crucial facts about the SBI Debt Hybrid Fund:

Fund House SBI Mutual Fund
Date of Launch April 09th, 2001
Benchmark  NIFTY 50 - Hybrid Composite Debt 15:85 Index
Fund Type Open-Ended
Expense Ratio 1.1%
Risk Profile Moderately High
NAV (as of April 03, 2023) Rs. 56.13
Turnover -

Investment Objective

The investment objective of the SBI Conservative Hybrid Fund is to offer a flexible investment opportunity to investors. With SBI Conservative Hybrid Fund, investors can primarily invest in money markets or debts and, secondarily, in equity and equity-related instruments. It aims to provide safe avenues due to the significant chunk of investments in the debt portion.

Fund Summary

Following are the two types of investment options that SBI Conservative Hybrid Fund offers:

  1. SBI Conservative Hybrid Fund- Regular Plan-Growth:

    • Expense ratio: 1.1%

    • Exit Load: 1.0% in 365 days

    • AUM (Fund Size): Rs. 7250.39 Cr

    • Net Asset Value (NAV): Rs.56.1325 (as of April 03, 2023)

    • Returns (1 year): 5.48%

    • CAGR (Since inception): 8.09%

    • Lock-in Period: No Lock-in period

    • Minimum Investment: The scheme has a minimum initial investment of Rs. 5,000 lump sum and a minimum additional investment of Rs. 1,000. For SIP, the minimum initial investment is Rs. 1,000.

  2. SBI Conservative Hybrid Fund- Direct Plan-Growth:

    • Expense ratio: 0.57%

    • Exit Load: 1.0% in 365 days

    • AUM (Fund Size): Rs.7250.39 Cr

    • Net Asset Value (NAV): Rs.60.6305 (as of April 03, 2023)

    • Returns (1 year): 6.03%

    • CAGR (Since inception): 8.81%

    • Lock-in period: No Lock-in Period

    • Minimum Investment: For SIP, the minimum investment is Rs. 500, and for a lump sum, it is Rs. 5000.

Fund Return Summary

The table below shows the absolute and annualized returns of the SBI Conservative Hybrid Fund:

  1. SBI Conservative Hybrid Fund returns- Regular Plan-Growth (as of June 22, 2022)

    Period Invested for Absolute Returns Annualized Returns
    One week -0.52% -
    One month -1.01% -
    Three months -1.58% -
    Six months -1.93% -
    Year-To-Date -2.58% -
    1 Year 4.76% 4.76%
    2 Year 25.96% 12.23%
    Since Inception 421.27% 8.07%
  2. SBI Conservative Hybrid Fund Returns- Direct Plan-Growth (as of 22nd June 2022)

    Period Invested for Absolute Returns Annualized Returns
    One week -0.51% -
    One month -0.96% -
    Three months -1.45% -
    Six months -1.67% -
    Year-To-Date -2.33% -
    1 Year 5.36% 5.36%
    2 Years 27.44% 12.89%
    Since Inception 134.90% 9.45%

Pros and Cons

Pros Cons
Flexible investment options to invest in debts, equity, and money market instruments. Funds are dynamic, which poses a credit risk on the debt side.
The debt portion provides moderate but steady income. Suitable only for an investment horizon of 3 years or more.
Offers a Tax benefit compared to traditional fixed income products like FD. The equity portion in the fund adds a bit of volatility.
Low downside risk. -
There is no lock-in period. -
Best for long-term systematic withdrawal plans. -

Benefits of the SBI Conservative Hybrid Fund 

  • Better Returns than FDs:  SBI Conservative Hybrid Fund has historically given better returns than the traditional investment plans like FD. The reason for higher returns is its flexibility to include equity in the portfolio. The higher returns also come with a risk that is comparatively less. That is why it is worth investing in.

  • Comparatively Less Risky than Other Hybrid Funds: SBI Conservative Hybrid Fund is a Conservative Hybrid Fund. These funds carry lower risk and focus more on the safety of the principal amount. Along with this, it also aims to gain higher returns. If compared to other hybrid funds, it carries lower volatility and risks.

  • Diversified Portfolio: A diversified portfolio is a key to any investment strategy. It reduces the portfolio risk. SBI Conservative Hybrid Fund has a well-diversified portfolio with a mix of debt and equity. A predominant investment in debt instruments ensures a safe return to the investor's portfolio.

  • Better Long-Term Results: SBI Conservative Hybrid Fund has shown comparatively higher returns when compared with S&P BSE 10-year sovereign bond index. So, it indicates that the fund performs better and results in the long term.

  • Low Downside Risk: The fund assets benefit investors in terms of low downside risks in a volatile market. Historically, this fund has seen a very low downside in significant market downside periods. It reduces the risk for the investor.

  • Quick Recovery: This fund has shown a faster recovery from the fall than other hybrid funds. The fund is secure and has the potential to recover from losses in a shorter duration which helps in the longer run.

  • Convenient Option: SBI Conservative Hybrid Fund offers investors convenient ways to invest. Investors can invest in the form of SIP or lumpsum amounts. In addition, the online interface of the SBI Conservative Hybrid Fund makes the investment and redemption process much easier for investors.

Who Should Invest in the SBI Conservative Hybrid Fund?

Investors who fit in any of the below-mentioned categories should invest in an SBI Conservative Hybrid Fund.

  • Investors are looking forward to investing a small portion of their equity money and aiming to get extra returns.

  • Investors that are looking for some capital growth with stable returns.

  • Investors who are willing to take low to moderate risks.

  • Senior citizens close to retirement are looking for post-retirement income options. 

  • Investors with investment tenure of a minimum of 3 to 5 years.

  • Investors seek higher returns than FD by taking a minimum risk.

FAQ's

  • Who manages the SBI Conservative Hybrid Fund?

    Ans. Mr. Saurabh Pant, Mr. Neeraj Kumar, and Mr. Mohit Jain have managed SBI Conservative Hybrid Fund since January 2022.
  • What is Portfolio Turnover?

    Ans. Portfolio turnover measures how frequently fund managers buy or sell assets or securities in investors' funds over a given time. It is calculated considering the complete amount of new assets sold or purchased (whichever is less) over a specific period divided by the fund's total net asset value (NAV).
  • What is meant by AUM?

    Ans. AUM stands for "Assets Under Management”. It defines the total market value of investments that a person manages. Some financial institutions include factors like mutual funds, deposits, cash, etc., to calculate AUM.
  • What is CAGR?

    Ans. CAGR stands for "Compound Annual Growth Rate." It is the investment's mean annual growth rate over a particular period longer than one year. CAGR form the vital factor determining returns for an investment portfolio, individual assets, etc.
  • How much portion of my portfolio should I invest in Conservative (Debt) Hybrid Funds?

    Ans. It depends on your investment goals, risk appetite, and income. If you are looking for more investment in the debt portion and less in the equity, Conservative Hybrid Funds is a wise choice.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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