Nippon India MF Hybrid Funds: All weather funds for your portfolio

Current Market Context

Equity market has been volatile for the last 15 months. Though the market recovered from March 2025 lows, market continued to be volatile due to uncertainty about tariffs, geo-political tensions, escalating global trade conflicts, depreciating INR and continuing FII sell offs. Market recovered strongly after US and India reached an agreement on trade deal. Tariffs on India’s exports to the US have been reduced to 18% from the peak rate of 50%. This will make India’s exports to the US more competitive than many other countries who have higher tariff rates imposed on their exports to the United States.

As far as debt investments are concerned, we have seen both short term and long-term bond yields stiffening. Huge supply of State Government debt in Q4 of FY 2025-26, pushed up bond yields and led to decline in bond prices.

After months of spectacular rallies, precious metals prices crashed as US dollar strengthened and US bond yields. In the MCX, gold spot prices crashed by 15% from peak levels, while silver spot prices crashed by 37%. While correction in precious of metal prices was overdue after the record-breaking rally, the high volatility in gold and silver surprised many investors.

Why hybrid in current market conditions?

In current market conditions, in which geo-political uncertainty and volatility in asset prices seem to be the new normal, diversifying your investment across different asset classes will bring stability and improve performance consistency of your portfolio. Different asset classes have low or even negative correlation of returns in different investment cycles. i.e. if one asset class underperforms, the outperformance of another asset class will balance the risks.

Hybrid fund for different risk profiles

Hybrid funds can provide a range of asset allocation solution for investors with different risk appetites and investment needs. You should select a fund based on your risk appetite. In this article, we will discuss about 5 different hybrid funds offered by the Nippon India Mutual fund - Nippon India Conservative Hybrid Fund, Nippon India Equity Savings Fund, Nippon India Balanced Advantage Fund, Nippon India Multi Asset Allocation Fund and Nippon India Aggressive Hybrid Fund.

Nippon India Conservative Hybrid Fund

As per SEBI’s mandate, conservative hybrid funds must invest 75 - 90% of their assets in debt or money market instruments and 10 - 25% in equity. Nippon India Conservative Hybrid Fund intends to offer the power of equity along with the stability of debt. For the debt part, the fund focuses on accrual strategy through right blend of short to medium term tenor corporate bonds. Fund aims to maintain low to moderate duration in the current market scenario to reduce interest rate risk. For the equity part, the fund aims to replicate Nifty 50 with a long-term view.

The chart below shows the 1-year rolling returns of the fund versus the category average over the last 5 years. You can see that the fund was able to outperform the category average over most periods.

Source: Advisorkhoj Rolling Returns as on 9^th February 2026

The 1-year rolling returns distribution shows that the fund never gave negative returns over 1 year investment tenures in the last 5 years. Moreover, the fund delivered 8%+ CAGR returns in 64% of the instances, showing much superior consistency compared to the category average.

Source: Advisorkhoj Rolling Returns as on 9^th February 2026

Nippon India Equity Savings Fund

Equity savings funds can partially hedge their equity allocation using derivatives; while maintaining gross equity allocation of at least 65% - thus these funds enjoy equity taxation. These funds must invest at least 10% of their assets in debt and money market instruments. The asset allocation of Nippon India Equity Savings Fund is as follows: -

• Equity Allocation - The net equity (unhedged equity) allocation of the fund can range from 25 - 40%. The equity portion will have high active share (minimum 60%) and have a large cap bias (minimum 65%). It invests across industry sectors.


• Arbitrage Allocation - The fund allocates 25 - 70% to arbitrage opportunities. Arbitrage allocation reduces risk and ensures equity taxation for the fund.


• Debt allocation - The debt allocation of the fund can range from 10 - 35%. The modified duration of the debt portion is maintained between 2 - 4 years (moderate interest rate risk). The credit quality is high.

The chart below shows the 1, 2 and 3 year rolling returns of Nippon India Equity Savings Fund versus Nifty 50 TRI (representing pure equity) and Nifty Composite G-Sec Index (representing pure debt) over the last 5 years. You can see that the fund gave higher returns than the debt benchmark, while limiting downside risks compared to the equity benchmark. Lower volatility is one of the main attributes of Equity Savings Funds. The risk return trade off of this fund is favourable for investors who do not have high risk appetite or for new investors.

Source: Advisorkhoj Rolling Returns as on 9^th February 2026

The chart below shows the drawdowns of the fund versus Nifty 50 TRI. You can see that the fund had much smaller drawdowns limiting downside risks.

Source: Advisorkhoj Rolling Returns as on 30^th January 2026

Nippon India Balanced Advantage Fund

Balanced Advantage Funds dynamically manage their asset allocation according to market conditions. Nippon India Balanced Advantage Fund uses an in-house proprietary dynamic asset allocation model which takes into consideration fundamental, technical and macro parameters:

• Valuations: The model uses 1-year forward P/E. Valuations are fulcrum of the model.


• Trend following/momentum: This is a unique parameter which aids in maximizing Upside Potential and Limiting downside risk.


• Trade weighted US Dollar: A strong Dollar typically coincides with weaker phases of Equity prices, while a weaker Dollar coincides with strong equity performance.


• Global Demand Indicators: A combination of Lumber/Copper/Nickel prices acts as a strong indicator of global economy and markets.

The chart below shows the 3-year rolling returns of Nippon India Balanced Advantage Fund versus the Balanced Advantage Funds category average returns over the last 5 years. You can see that the fund was able to consistently outperform the category average. Performance consistency in different market conditions is in our view one of the most important performance parameters, because investors are looking for consistency and stability when they invest in Balanced Advantage Funds. The fund did not give negative returns and gave double digit returns in 100% of the instances (see the chart below).

Source: Advisorkhoj Rolling Returns as on 9^th February 2026

The graphic below shows the quartile rankings of the fund for the last 12 quarters. You can see that the fund figured in the top 2 quartiles, 7 times in the last 12 quarters - strong relative performance consistency.

Source: Advisorkhoj Research as on 31^st December 2025

Nippon India Multi Asset Allocation Fund

Multi Asset Allocation Funds are mandated by SEBI to invest in at least 3 or more asset classes. Minimum allocation to each asset class will be 10%. Nippon India Multi Asset Allocation Fund is a "true to label multi asset fund" as it invests in 4 asset classes:

• Equity Allocation - Multi Cap investment strategy, blend of growth and value stocks, large cap bias, focus on alphas creation through stock selection.


• Debt Allocation - Debt portfolio is managed with a moderate duration; duration range of 1.25 - 2.25 years, predominantly invest in high credit quality assets, focused on Accrual Income.


• Commodities allocation - The fund invests in Exchange Traded Commodity Derivatives (ETCDs). Maximum commodity exposure will be 20%. Minimum 10% investment in gold through ETFs / ETCDs. 5 - 10% exposure to other commodities.


• Overseas equity allocation - Investment across geographies through investment in MSCI World Index. Overseas equities could act as an effective diversification tool as well as benefit from any currency depreciation.

Nippon India Multi Asset Allocation Fund is one of the few multi asset allocations hybrid funds which has allocations to international equities. The chart below shows the 3-year rolling returns of Nippon India Multi Asset Allocation Fund versus the Multi Asset Allocation Funds category average since the inception of the fund. You can see that the fund was able to consistently outperform the category average over 3-year investment tenures in the last 5 years. The fund was able to give 12%+ CAGR returns in 100% of the instances (observations) across different market conditions since its inception.

Source: Advisorkhoj Rolling Returns as on 9^th February 2026

The graphic below shows the quartile rankings of the fund for the last 12 quarters. You can see that the fund figured in the top 2 quartiles, 10 times in the last 12 quarters - very strong relative performance consistency.

Source: Advisorkhoj Research as on 31^st December 2025

Nippon India Aggressive Hybrid Fund

As per SEBI’s mandate, aggressive hybrid funds must invest 65 - 80% of their assets in equity market instruments and 20 - 35% in equity in debt and money market instruments. Nippon India Aggressive Hybrid Fund attempts to optimize the benefit of Equity Growth potential with potential stability of fixed income investments with the aim of generating relatively better risk adjusted returns. In the equity portion the fund aims to maintains a large cap-oriented portfolio with a tactical exposure to emerging leaders that may help to generate alpha. The fixed income strategy is focused on generating higher accrual through investments with higher allocation towards high quality instruments with a moderate duration.

The chart below shows the 3-year rolling returns of Nippon India Aggressive Fund versus the Aggressive Hybrid Funds category average since the inception of the fund. You can see that the fund was able to consistently outperform the category average over 3-year investment tenures in the last 5 years.

Source: Advisorkhoj Rolling Returns as on 9^th February 2026

The graphic below shows the quartile rankings of the fund for the last 12 quarters. You can see that the fund figured in the top 2 quartiles, 7 times in the last 12 quarters - strong relative performance consistency.

Source: Advisorkhoj Research as on 31^st December 2025

Taxation

Who can invest?

• Investors looking for capital appreciation and income over long investment horizons.


• Investors who want to reduce portfolio volatility by diversifying across multiple asset classes.


• Investors with minimum 3 - 5 years investment tenure.


• Investors with moderately high to high-risk appetites.


• Suitable for first time investors.


• You can select any Nippon India MF hybrid fund based on your risk appetite and investment needs. You can also invest in a combination of 2 or more funds.

Consult your financial advisors or mutual fund distributors to find out which Nippon India MF hybrid fund will be suitable for your investment needs.