HDFC Monthly Income Plan

A steady monthly income plan assures a peaceful life without hurting the principal invested. In 2018, HDFC Monthly Income Plan - managed by the HDFC Mutual Fund and which was designed to provide monthly income to its investors - was merged with HDFC Hybrid Debt Fund, a conservative hybrid fund that invests roughly a quarter of your money in equity shares and the majority in fixed income securities.

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Fund in Brief

The HDFC Hybrid Debt Fund - managed by the HDFC Mutual Fund - has been in the market for nearly two decades. The fund has a 23 percent equity allocation and a 63 percent debt allocation to strike a mix between promising returns and investment security. These are offered in two plans:

  • Regular Plan

  • Direct Plan

These options are further offered in three options:

  • Growth option

  • Income Distribution and Cash Withdrawal (IDCW) option

HDFC Hybrid Debt Fund Facts

Fund House HDFC Mutual Fund 
Asset Management Company HDFC Asset Management Company Limited
Category of the fund Hybrid
Class of the fund Equity
Launch date December 26, 2023
Benchmark NIFTY 50 Hybrid Composite Debt 15:85
Open/Close Open
Risk level High
Investment amount Minimum investment = Rs 5,000
Entry load Zero
Exit load For units in excess of 15% of the investment, 1% will be charged for redemption within 365 days
Lock in Period Not applicable

Investment Objective

The primary objective of the HDFC Hybrid Debt Fund is to generate income and/or capital appreciation by investing primarily in debt securities and money market instruments with moderate exposure to equities. The fund's equity investments are in the technology, energy, financial, healthcare, and construction industries. 

It has relatively lesser exposure in the Financial and Technology sectors as compared to other funds in the category. However, the debt portion of the fund is not of topmost credit quality, indicating that the quality of borrowers it has lent it to is not of the gold standard.

Fund Summary

  1. HDFC Hybrid Debt Fund - Regular Plan (Growth)

    • Risk: Moderately High

    • Expense Ratio (as of March 31, 2022): 1.81% 

    • Net Asset Value (NAV): INR 59.672 (as of May 02, 2022)

    • Returns: 9.97% (1 year)

    • Compound Annual Growth Rate (CAGR): 10.22% p.a. (since inception)

  2. HDFC Hybrid Debt Fund - Regular Plan (IDCW – Quarterly)

    • Risk: Moderately High

    • Expense Ratio (as of March 31, 2022): 1.81% 

    • Net Asset Value (NAV): INR 14.1124 (as of May 02, 2022)

    • Returns: 11.84% (1 year)

    • Compound Annual Growth Rate (CAGR): 8.83% p.a. (since inception)

  3. HDFC Hybrid Debt Fund - Regular Plan (IDCW – Monthly)

    • Risk: Moderately High

    • Expense Ratio (as of January 31, 2022): 1.81% 

    • Net Asset Value (NAV): INR 13.2350 (as of May 02, 2022)

    • Returns: 10.63% (1 year)

    • Compound Annual Growth Rate (CAGR): 8.72% p.a. (Since inception)

  4. HDFC Hybrid Debt Fund - Direct Plan (Growth)

    • Risk: Moderately High

    • Expense Ratio (as of January 31, 2022): 1.21% 

    • Net Asset Value (NAV): INR 62.4813 (as of May 02, 2022)

    • Returns: 10.49% (1 year)

    • Compound Annual Growth Rate (CAGR): 9.63% p.a. (Since inception)

  5. HDFC Hybrid Debt Fund - Direct Plan (IDCW – Quarterly)

    • Risk: Moderately High

    • Expense Ratio (as of January 31, 2022): 1.21% 

    • Net Asset Value (NAV): INR 15.1214 (as of May 02, 2022)

    • Returns: 12.25% (1 year)

    • Compound Annual Growth Rate (CAGR): 7.90% p.a. (since inception)

  6. HDFC Hybrid Debt Fund - Direct Plan (IDCW – Monthly)

    • Risk: Moderately High

    • Expense Ratio (as of January 31, 2022): 1.21% 

    • Net Asset Value (NAV): INR 14.1944 (as of May 02, 2022)

    • Returns: 11.11% (1 year)

    • Compound Annual Growth Rate (CAGR): 7.73% p.a. (since inception)

Fund Return Summary

  1. HDFC Hybrid Debt Fund – Regular plan - Growth:

    Tenure   Annualized return
    1 year 9.91%
    2 years 15.10%
    Since inception 10.22%
  2. HDFC Hybrid Debt Fund – Regular plan – IDCW - Quarterly:

    Tenure   Annualized return
    1 year 11.77%
    2 years 16.04%
    Since inception 8.83%
  3. HDFC Hybrid Debt Fund – Regular plan – IDCW – Monthly:

    Tenure   Annualized return
    1 year 10.57%
    2 years 15.44%
    Since inception 8.72%
  4. HDFC Hybrid Debt Fund – Direct plan – Growth:

    Tenure   Annualized return
    1 year 10.43%
    2 years 15.61%
    Since inception 9.63%
  5. HDFC Hybrid Debt Fund – Direct plan – IDCW – Quarterly:

    Tenure   Annualized return
    1 year 12.18%
    2 years 16.50%
    Since inception 7.90%
  6. HDFC Hybrid Debt Fund – Direct plan – IDCW – Monthly:

    Tenure   Annualized return
    1 year 11.05%
    2 years 15.93%
    Since inception 7.73%

    *Returns are subject to change.

    *The unit holder bears the investment risk in the investment portfolio.

Pros and Cons

Pros Cons
The fund's ability to deliver returns consistently is in-line with most funds of its category.  It has moderate capability to control losses in a falling market 
The fund can provide income at a rate of return higher than fixed deposits over a period of 1 year or more It is not effective for wealth creation

Benefits of the HDFC Hybrid Debt Fund

The following are the perks of the HDFC Hybrid Debt Fund that you should be aware of if you decide to invest in it:

  • Dual Benefits: The fund provides opportunities to generate income with an added opportunity for capital gains. 

  • Lower Relative Volatility: NAVs of hybrid funds are less volatile than pure equity funds when the stock market declines on account of adequate debt allocation. These funds are suited for you if you prefer equity allocation on a conservative basis.

Fund House Details

The HDFC Hybrid Debt Fund is offered by the HDFC Mutual Fund House. It is managed by HDFC Asset Management Company Limited, which is one of the most trusted fund houses for its long successful run in the market. 

The Fund House is sponsored by Housing Development Finance Corporation Limited (HDFC) and Standard Life Investments Limited, which owns 52.7% and 21.2% stakes. The fund’s products provide wealth creation opportunities and income to its large retail and institutional customer base of close to 100 lakh accounts. 

The fund’s customers are catered to by distributors spread over 200 cities with a network of 224 branches and 1,163 employees. Mr. Prashant Jain, as the Chief Investment Officer, heads the team of fund managers of various schemes.

Who Should Invest in the HDFC Hybrid Debt Fund?

As an investor, the fund is appropriate for you if you seek:

  • Regular income: The debt portion of these vehicles generates a moderate but consistent revenue stream. The tiny equity investment, on the other hand, introduces some volatility but helps to enhance returns to keep up with inflation over time.

  • Three-year or longer investment horizon: Invest your accumulated resources in these funds gradually over at least a few months to obtain dependable income with some inflation protection, and then maintain an annual withdrawal rate in the region of 8% -10% of the value of your investment. The exit load provides for this systematic withdrawal subject to a cap of 15% of the fund invested.

In Conclusion

The HDFC Hybrid Debt Fund is a fund that invests in equity, debt, and money market instruments in varying proportions. It provides opportunities for steady income as well as for moderate capital appreciation. It is suitable for investors preferring a balanced investment approach, provided they hold the investments for more than three years.

FAQ's

  • Should I invest in HDFC Hybrid Debt Fund by way of a SIP or as a lump sum?

    Being a fund with an equity component, the NAV of HDFC Hybrid Debt Fund is expected to display volatility in the short to medium term. Hence, it is recommended that investment in HDFC Hybrid Debt Fund be through a Systematic Investment Plan or SIP, as it provides the investor with the flexibility to invest a smaller amount every month in times of volatility without the risk of investing a lump sum amount at elevated NAVs. 
  • How should I invest in HDFC Hybrid Debt Fund to fund retirement?

    You should invest in this fund to finance your retirement goal at least five years before your expected retirement date.
  • What is the taxation for HDFC Hybrid Debt Fund investors?

    When you sell your Conservative Hybrid Fund units after the lock-in period, your gains are taxed at a rate of 20% after taking into account inflation indexation. If you sell your fund units within three years after investing, the full gain is applied to your income to arrive and taxed at the applicable slab rate. You don’t have to pay any tax as long on the units that you continue to hold.
  • Who is the fund manager(s) of HDFC Hybrid Debt Fund?

    Priya Ranjan, who has over 14 years of experience in equities research, has been managing the two HDFC Hybrid Debt Fund plans since May 1, 2022.
  • How does the fund make investments in debt securities?

    In order to generate regular income, the fund invests funds in a mixed portfolio of money market instruments and high-quality debt. The fund manager allocates the funds after taking into consideration the prevailing interest rate scenario, and liquidity of the different instruments in addition to the general macroeconomic condition, political and financial environment, inflationary conditions, corporate performances, and other economic considerations.
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HDFC Monthly Income Plan Reviews & Ratings

4.3 / 5 (Based on 24 Reviews)
(Showing Newest 10 reviews)
S.B
Kolaval, September 06, 2016
Perfect
The traditional insurance plan i have is perfect and the premium is also less. Great services provided by hdfc life insurance company. Policy cover's maximum and claims are high which is simple to cleared. The any further information or updates are mailed to me regularly.
Vijay
Kamrup, August 24, 2016
Traditional Insurance Plan
Great traditional insurance plan i have purchased in less investment. Service is fine but the online renewal through online portal is very good option. Policy coverage and claims are more than i expected. Fabulous work you have done hdfc standard life insurance.
Jiten
Fakirpur, August 22, 2016
Investment plan
HDFC life insurance provide's me the traditional insurance policy. The policy coverage is good and claiming procedure is simple only because of quick service provided by the executives and staff members.
Kunal
Mumbai, April 15, 2016
Great Policy
I own hdfc insurance traditional plan. Plan is good and premium is low. Policy coverage is high ~89 and payback returns too. Claiming amount is Rs.43 L after policy get mature. Service is fast like super sonic speed. The daily updates are mailed to me time to time. Overall, perfect policy plan which save tax too.
Yogesh
Kota, April 15, 2016
Perfect Plan
My hdfc life traditional policy plan is good in services. The policy coverage is good ~93% and the premiums are low. Claiming process is easy due to fast service provided by the executives and the staff members. The payback amount is ~Rs.41 L. I like the terms and conditons. Good work.
Prashant
Surat, April 15, 2016
Good
The policy i have is hdfc traditional policy plan which is very good and the premiums are low with high in policy coverage 91%. The claiming part is very easy because the service is very fast with good response from the staff members. Nice future investment with tax savings. I like the policy.
Rahul
Pune, February 22, 2016
Hdfc life classic Assure plus plan
i got policy classic assure plus. It was the one of the best plan ever. i always refers to my frends take this plan. Service is also Good.
Kuntal
Kolkata, February 18, 2016
above average.
I own hdfc life insurance traditional plan. Plan is good and investment is low. Policy coverage is 80% and the claims Rs.15 lakh. Service you provided is good and every time the work done at correct time period.
Plan Name: Click2Invest
Agent Code: BPW00248
Mainak
Mumbai, February 18, 2016
Nice insurance.
My policy is hdfc traditional plan. The service is really very attractive and the premium is 4899. Claims is Rs.18 lakh and the policy coverage is 70-80%. I'm happy with my policy plan.
Plan Name: Click2Invest
Agent Code: BBE04411
Amruthesh
Bengaluru, February 16, 2016
Fair plan.
Plan is good with average facilities. Low inputs and out comes are also less. HDFC life insurance traditional plan is one of the most popular plan in middle class people. Premium is Rs.3599 quaterly and return is around 17 lakhs.
Plan Name: Click2Invest
Agent Code: BBE05131
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