HDFC Monthly Income Plan

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

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.

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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)

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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

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.

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