Top 10 Hybrid Mutual Funds: Perfect for Your 2026 Portfolio

Did you know that hybrid mutual funds attracted an impressive Rs 1.45 trillion inflow in FY24, raising their AUM to Rs 7.2 trillion? That is the exact reason why many investors are choosing this balanced approach that combines equity for growth and debt for stability, without risking too much in the market. If you also want to build a strong portfolio in 2026, consider investing in the top 10 hybrid mutual funds that will help you balance risk while targeting returns.

Some top choices of 2026 include ICICI Prudential Equity & Debt Fund with 23.45% returns, UTI Aggressive Hybrid Fund with 18% returns, Nippon India Aggressive Hybrid Fund with 17.01% returns, etc., over 5 years.

Curious to know the complete list of the top 10 hybrid mutual funds in 2026? Dive into this post, which will answer all your questions related to hybrid fund investments. So, let us level up your 2026 portfolio.

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Overview of Hybrid Mutual Funds

Hybrid mutual funds are investment instruments that combine multiple asset classes, commonly equity and debt, into a single portfolio for balanced growth and stability. These mutual funds deliver reasonable returns with lower volatility than pure equity funds.

These funds are suitable for individuals who can handle moderate risk, have a 1 to 3-year or more investment horizon and want to invest in a mix of stocks & bonds to grow safely in the middle of the market swings.

There are many types of hybrid funds that align with different goals and risk levels, which are:

Conservative Hybrid Funds: Focus on debt (75-90%) with less equity exposure (10-25%).
Aggressive Hybrid Funds: These funds invest 65-80% in equity and the remaining in debt.
Balanced Hybrid Funds: Maintain a balance by allocating roughly equal amounts to equity and debt (40-60% each).
Dynamic Asset Allocation Funds or Balanced Advantage Funds: Provide automatic adjustment between equity and debt based on the market.
Multi-Asset Allocation Funds: These funds invest in at least 3 asset classes, such as equity, debt and gold.
Arbitrage Funds: Take advantage of price differences in cash and derivatives markets and keep at least 65% of your investments in equities.
Equity Savings Funds: Combine investments in equity, debt and arbitrage and give you moderate equity exposure with some hedging.

Now, let us look at the list of the top hybrid mutual funds in 2026.

Listing Top 10 Hybrid Mutual Funds in 2026

Here are the top 10 hybrid mutual funds that will be an excellent fit for your 2026 portfolio:

Fund Name	Category	Launch Date	Expense Ratio	View Details
ICICI Pru Equity & Debt Fund	Hybrid: Aggressive	05-11-1999	0.93%	View Details
UTI Aggressive Hybrid Fund	Hybrid: Aggressive	20-03-1995	1.22%	View Details
Nippon India Aggressive Hybrid Fund	Hybrid: Aggressive	05-06-2005	1.08%	View Details
HDFC Hybrid Debt Fund	Hybrid: Conservative	01-12-2003	1.17%	View Details
Nippon India Conservative Hybrid Fund	Hybrid: Conservative	29-12-2003	1.09%	View Details
ICICI Pru Equity Savings Fund	Hybrid: Equity Savings	05-12-2014	0.50%	View Details
Kotak Equity Savings Fund	Hybrid: Equity Savings	11-10-2014	0.68%	View Details
ICICI Pru Multi Asset Fund	Hybrid: Multi Asset Allocation	31-10-2002	0.67%	View Details
Nippon India Multi Asset Allocation Fund	Hybrid: Multi Asset Allocation	10-08-2020	0.27%	View Details
Quant Multi Asset Allocation Fund	Hybrid: Multi Asset Allocation	21-03-2001	0.67%	View Details

Must Read: Best Debt Mutual Funds in 2026 for Stable and Safe Returns

Next, let us analyse their 3 and 5-year returns and see how consistent these funds were.

Performance of Top 10 Hybrid Mutual Funds Based on 3-Year and 5-Year Returns

Here is the performance analysis of the top 10 hybrid mutual funds over two investment horizons

Fund Name	AUM (in cr)	3 Years	5 Years	Fund Manager
ICICI Pru Equity & Debt Fund	48,071	18.69%	23.45%	Sankaran Naren
UTI Aggressive Hybrid Fund	6,596	15.80%	18%	Jaydeep Bhowal
Nippon India Aggressive Hybrid Fund	4,081	14.42%	17.01%	Divya Dutt Sharma
HDFC Hybrid Debt Fund	3,379	9.65%	10.31%	Shobhit Mehrotra
Nippon India Conservative Hybrid Fund	918	9.04%	8.67%	Divya Dutt Sharma
ICICI Pru Equity Savings Fund	16,994	8.81%	8.99%	Kayzad Eghlim
Kotak Equity Savings Fund	9,023	11.56%	11.01%	Abhishek Bisen
ICICI Pru Multi Asset Fund	71,900	18.88%	23.07%	Sankaran Naren
Nippon India Multi Asset Allocation Fund	8,722	19.31%	17.31%	Divya Dutt Sharma
Quant Multi Asset Allocation Fund	4,058	19.75%	26%	Sanjeev Sharma

Pro Tip: Use a SWP Calculator to plan for your regular mutual fund unit withdrawals.

In the next heading, you will understand why hybrid mutual funds are suitable for your investments in 2026.

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Why Consider Hybrid Mutual Funds for Your 2026 Portfolio?

Hybrid mutual funds are a strong consideration for your 2026 investment portfolio because of the benefits these funds offer you. The main benefit is the built-in diversification that helps you in your growth, while managing risks, even if the market is facing global uncertainties. The suitability of hybrid funds can further increase with the new SEBI regulations that allow greater exposure to REITs (Real Estate Investment Trusts) starting in 2026.

The following are the main reasons why you should consider investing in the top 10 hybrid mutual funds in 2026:

These funds can mitigate risks during market fluctuations.
The fund managers of these funds rearrange your investment for you.
Offers broader diversification across multiple asset classes.
These mutual funds are easy to adapt and can suit varying risk profiles.
Gives you both the growth potential of equity and the stability of debt funds.

These reasons show that it can be a good option for both beginners and experienced investors in 2026.

Also Read: Best Small Cap Mutual Funds for Long Term Investment in 2025

Now, let us explore the benefits of hybrid mutual fund investments.

Benefits of Investing in Hybrid Mutual Funds in 2026

The following are the benefits of investing in the top hybrid mutual funds in 2026:

Diversified Risk Management

With the combination of equity and debt, the hybrid funds provide a balanced risk-return profile.

Automatic Rebalancing

The fund managers who control the operations of these funds automatically rebalance your portfolio according to the market conditions.

Enhanced Asset Class Exposure

According to the new guidelines of SEBI, the investments in REITs will be treated as equity investments from 2026, allowing this fund to add a new asset exposure to its menu.

Tailored for different goals

Hybrid funds are highly suitable for medium-term goals and they are also beginner-friendly, making them reliable for new investors.

Now the main question is, how can you choose the right hybrid fund for yourself? Let us learn the procedure in the next part.

How to Choose the Right Hybrid Mutual Funds for Investment?

For choosing the best fund for your portfolio, it is most important to determine your investment goal and risk profile and evaluate the fund's characteristics. Here is the process of choosing the right fund from the top 10 hybrid mutual funds for your 2026 portfolio:

Step 1: Understand the needs for the investments clearly.
Step 2: Search for the hybrid fund category that suits your goals.
Step 3: Compare the funds within the category thoroughly.
Step 4: Review the fund's performance and look for consistency.
Step 5: Select an appropriate fund from the chosen category.
Step 6: Select a suitable investment method from a Best SIP plan or a lump sum and place your investment.

Here is a tip for you, if you are confused and cannot decide on a fund that suits you, then consider going to an advisor for personalised guidance.

Pro Tip: Use a SIP Calculator and estimate the future returns of your SIP investment easily.

Lastly, let us look at the tax rates imposed on the hybrid investments.

Taxation of Hybrid Mutual Funds: Equity vs. Debt

In India, the hybrid mutual funds are categorised as either equity-oriented or debt-oriented, with different tax rules applied to each category. The following are the tax rates for hybrid mutual fund investments in India:

Aspect	Equity-Oriented Hybrid	Debt-Oriented Hybrid
STCG Holding Period	12 months or more	24 months or more
STCG Tax Rate	20% (+ surcharge & cess)	As per income tax slab
LTCG Holding Period	More than 12 months	More than 24 months
LTCG Tax Rate	12.5% on gains more than Rs 1.25 lakh (no indexation)	Slab rate (no indexation post-April 2023)
Dividend Taxation	Slab rate and TDS if more than Rs 5,000/AMC	Slab rate and TDS if more than Rs 5,000/AMC
TDS on Gains (NRIs)	No TDS	Applicable

Pro Tip: Use a Mutual Fund Screener to filter and compare mutual funds for investments.

The tax rates and holding periods of these funds were affected by the recent changes made in July 2024 for both types.

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Conclusion

To conclude, the top 10 hybrid mutual funds in India that are the best options for investors in 2026 with a medium-term horizon and moderate risk profiles are ICICI Pru Equity & Debt Fund, UTI Aggressive Hybrid Fund, Nippon India Aggressive Hybrid Fund, HDFC Hybrid Debt Fund and Nippon India Conservative Hybrid Fund.

These funds have given impressive returns and consistent performance with efficient risk management, making them highly suitable for your 2026 portfolio.

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