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HDFC Hybrid Equity fund is not doing well. What should I do with it?

Ashutosh Gupta advises investors to hold onto their investments in the fund for now

HDFC mutual funds are not doing great, especially HDFC Hybrid Equity as compared to other funds in the category. Please advise what needs to be done.
- Ashutosh Maru

HDFC Hybrid Equity was formed with the merger of the erstwhile HDFC Balanced Fund and the HDFC Premier Multicap Fund in 2018. This was done after the SEBI's reclassification and categorisation of mutual funds exercise.

The portfolio of this fund is fairly conservatively managed. The equity component of this fund is largely invested in large caps, while on the debt side as well, the fund manager likes to invest predominantly in the bonds of top-rated corporate issuers. The fund does invest a little bit of its portfolio in lower-than-top-rated papers but the fund manager well mitigates the risks by keeping the portfolio very well diversified.

Coming to the performance of this fund, its performance post the merger in 2018 hasn't been great but at the same time, it has not been an outright poor performer. So, while you can find more compelling options in the category of aggressive hybrid funds, this fund also does not rank among bottom performers. Hence, it would be worthwhile to wait and watch this one and if you already have investments, it's not a bad idea to continue to hold on to them.

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