How do Conservative Funds work?

Conservative Hybrid Funds invest predominantly in debt instruments, allocating 75% to 90% of their assets to debt, with the remaining portion invested in equities. This mix aims to provide a balance of stable income through the debt component and the potential for moderate capital appreciation through the equity component, making them suitable for risk-averse investors seeking slightly higher returns than pure debt funds.

Where are Conservative Funds typically invested in?

These funds are typically invested in a mix of debt securities, such as government bonds, corporate bonds, and money market instruments, along with a smaller portion in equities and equity-related instruments. The debt investments aim to provide stability and regular income, while the equity exposure seeks to enhance returns.

Do Conservative Funds give profit?

Conservative Hybrid Funds can generate profit from both the interest income on debt securities and capital appreciation from equity investments. While these funds aim to maintain a lower risk profile, the equity component provides an opportunity for additional returns, albeit with a conservative approach.

Are Conservative Funds tax-free?

No, the returns from Conservative Hybrid Funds are not tax-free. The tax treatment depends on the nature of returns (interest, dividends, or capital gains) and the holding period, similar to other mutual fund investments.

How are profits under Conservative Funds taxed?

Profits from the debt portion are taxed as per the holding period: short-term capital gains (held for less than three years) are taxed at your income tax rate, while long-term capital gains (held for more than three years) are taxed at 20% with indexation benefits. Equity gains are taxed at 15% for short-term (less than one year) and 10% for long-term (over one year) without indexation, subject to certain conditions.

How to choose the best Conservative Funds?

When choosing the best Conservative Hybrid Fund, consider factors like the fund's performance history, the asset allocation strategy, the credit quality of its debt portfolio, and the fund manager's expertise. Also, evaluate the fund's expense ratio and how its investment approach aligns with your risk tolerance and investment goals. Comparing these aspects can help identify a fund that suits your financial objectives.

Is it necessary to open demat account for investing in Conservative Funds?

No, opening a demat account is not necessary for investing in Conservative Hybrid Funds. You can invest directly through mutual fund AMC (Asset Management Company) or through online investment platforms that do not require a demat account. This makes it convenient for you to invest without the need for additional securities account management.

What is better in Conservative Funds - Lump Sum or SIP?

The choice between lump sum and SIP (Systematic Investment Plan) depends on your financial situation and investment strategy. A lump sum investment may be suitable if you have a substantial amount of money to invest at once. In contrast, SIPs are ideal for spreading your investment over time, potentially reducing the impact of market volatility and allowing you to benefit from rupee cost averaging.

How to start Conservative Funds SIP online?

To start an Conservative Fund SIP online, follow these 4 steps: 1. Open Demat Account, 2. Choose the Conservative Fund you wish to invest in, 3. Choose the SIP option, specifying the amount and SIP date, 4. Set up an auto-pay via bank account to automate the SIP payments.

Can you sell Conservative Funds anytime?

Yes, you can redeem your units in Conservative Hybrid Funds at any time. However, it's important to consider any applicable exit loads or charges that might affect your returns, especially if you redeem within a short period after investing. Checking the fund's specific exit load structure before investing can help you plan your investment horizon more effectively.

Is there any lock-in period for Conservative Funds?

Generally, Conservative Hybrid Funds do not have a lock-in period, offering you the flexibility to redeem their units as needed. However, specific tax-saving versions of these funds, like certain retirement plans, may have a lock-in period. It's always best to review the fund prospectus or fact sheet for any such conditions.

What are the risks associated with Conservative Funds?

Conservative Hybrid Funds, while lower in risk compared to pure equity funds, are subject to market risks, including interest rate risk and credit risk. The equity portion can fluctuate with market movements, and the debt investments carry the risk of changes in interest rates and the creditworthiness of issuers, albeit to a lesser extent due to the conservative nature of these funds.

Are Conservative Funds 100% safe?

No investment is 100% safe, and Conservative Hybrid Funds are no exception. While they aim to minimize risk by investing a larger portion in debt instruments and a smaller portion in equities, they still carry inherent market risks. The conservative allocation strategy does, however, make them a relatively safer investment option within the spectrum of mutual funds.

Invest in Top Conservative Funds in 2026

Name	1Y Returns	3Y Returns	5Y Returns
Bank of India Conservative Hybrid Fund Direct - Growth Compare	5.86%	8.16%	10.88%
Kotak Debt Hybrid Fund Direct - Growth Compare	4.54%	10.72%	10.05%
SBI Conservative Hybrid Fund Direct - Growth Compare	6.37%	10.12%	9.57%
HDFC Hybrid Debt Fund Direct - Growth Compare	4.09%	9.89%	9.42%
ICICI Prudential Regular Savings Fund Direct - Growth Compare	6.44%	10.52%	9.30%
Aditya Birla Sun Life Regular Savings Fund Direct - Growth Compare	6.91%	9.93%	9.03%
Aditya Birla Sun Life Regular Savings Fund- Monthly Payment-direct Plan Compare	6.91%	9.93%	9.03%
UTI Conservative Hybrid Fund Direct - Growth Compare	3.82%	9.62%	8.99%
Nippon India Conservative Hybrid Fund Direct - Growth Compare	8.88%	9.77%	8.85%
DSP Regular Savings Fund Direct - Growth Compare	4.47%	10.18%	8.52%
HSBC Conservative Hybrid Fund Direct - Growth Compare	5.42%	10.28%	8.51%
Baroda BNP Paribas Conservative Hybrid Fund Direct - Growth Compare	5.59%	9.62%	7.99%
Franklin India Conservative Hybrid Fund A Direct - Growth Compare	4.36%	9.31%	7.87%
Sundaram Conservative Hybrid Fund Direct - Growth Compare	2.14%	7.30%	7.75%
Canara Robeco Conservative Hybrid Fund Direct - Growth Compare	3.26%	8.61%	7.74%
Navi Conservative Hybrid Fund Direct - Growth Compare	11.26%	7.22%	7.59%
Axis Conservative Hybrid Fund Direct - Growth Compare	4.65%	8.56%	7.47%
LIC MF Conservative Hybrid Fund Direct - Growth Compare	4.57%	7.41%	6.38%
Bandhan Conservative Hybrid Fund Direct - Growth Compare	4.25%	8.32%	6.33%
Parag Parikh Conservative Hybrid Fund Direct - Growth Compare	7.01%	11.56%	-

Conservative funds are a type of investment that prioritizes capital preservation while aiming to provide steady, albeit modest, returns. These funds are ideally suited for you if you have a low-risk tolerance and prefer stability over high returns. They typically invest in a mix of low-risk assets, including debt instruments and a small portion of equities. Understanding their nature and composition is key to determining if they align with your investment goals.

Asset Allocation: Conservative funds usually have a higher allocation in debt instruments like bonds and a smaller portion in equities. This composition helps in maintaining low volatility.
Risk Profile: The primary focus of these funds is on protecting the capital, making them less risky compared to equity-oriented funds.
Return Expectation: Returns from conservative funds are generally modest, aligning with their low-risk investment strategy.

Conservative funds can be a fitting choice for you if capital preservation is your main objective and you are seeking steady returns with minimal risk. They serve well for short to medium-term investment horizons. However, the modest return profile should be a key consideration, especially if you're aiming for high growth or long-term wealth accumulation.

Investing in conservative funds offers several benefits, particularly if you are risk-averse or have specific investment needs that align with their characteristics.

Lower Risk: The primary advantage is the lower risk level, owing to the high allocation in debt instruments. This can be reassuring if market volatility concerns you.
Steady Income: These funds often provide a steady income stream, which can be appealing if you're looking for regular returns.
Capital Preservation: Conservative funds focus on preserving the invested capital, making them a good option for short-term financial goals where protecting your principal is crucial.
Diversification: Even with a conservative stance, these funds offer diversification across asset classes, albeit in a limited manner.
Suitable for Short to Medium-term Goals: They are particularly suitable for investment horizons that are not long enough to ride out the volatility of higher-risk investments.

Conservative funds offer a blend of safety, income, and a touch of growth potential. They are particularly well-suited for investors who prioritize capital preservation and those with a shorter investment horizon.

While the returns might be modest compared to more aggressive investment options, the stability and lower risk profile can be a key advantage for certain investment objectives. Always consider how well these funds align with your personal financial goals, risk tolerance, and investment timeframe.

Deciding whether investing in conservative funds is good for you or not depends on your individual financial goals, risk tolerance, and investment horizon. These funds are designed for capital preservation and tend to offer lower risk and stable returns. They invest primarily in fixed-income securities with a smaller allocation in equities. Here’s what you should consider:

Risk Tolerance: If you have a low-risk appetite and prefer stability over high returns, conservative funds might be a suitable choice.
Investment Horizon: These funds are generally more appropriate for medium to long-term investment horizons. This is because they need time to balance out the ups and downs of the stock market.
Income Needs: If your primary goal is to generate a steady income, conservative funds can be an option, as they often invest in income-generating assets.

Conservative funds are ideal for those prioritizing capital preservation with a low-risk tolerance. While they provide stability during market uncertainty, the trade-off is modest returns. It's crucial to align these investments with overall financial goals, considering they may not be suitable for long-term growth objectives if you wish to gain higher returns.

Conservative funds are particularly well-suited for certain types of investors:

Risk-Averse Investors: If you prefer to avoid the ups and downs of the market, conservative funds might be a good fit.
Near-Retirement or Retired Individuals: Those close to or in retirement may find these funds appealing due to their focus on capital preservation and providing regular income.
Short to Medium-term Financial Goals: If you have financial goals that you aim to achieve in the next few years, conservative funds can be a prudent choice as they aim to protect your capital.
New Investors: For those who are new to investing and are not yet ready to take on higher risks, starting with conservative funds can be a wise step.
Those Seeking Stability: In times of economic uncertainty or market volatility, you might prefer the stability offered by conservative funds.

Conservative funds can be a suitable investment choice for you if you are cautious about risk, nearing retirement, have short-term financial goals, are new to investing, or seek stability in uncertain times. They offer a way to participate in the investment world with a safety-first approach.

However, it’s crucial to balance these investments with your overall portfolio, keeping in mind that the lower risk often means lower potential returns compared to more aggressive investment strategies.

Explore | Sitemap

*All securities mentioned on this website are exemplary and not recommendatory.

*Current prices on the website are delayed by 15 mins, login to check live prices.

We are bullish on India, we are bullish on India's prospects to be one of the largest economies in the world. We believe that the stock market provides a unique opportunity for all of India's traders and investors to participate in the growth story of the country.

Yet, most investing & trading platforms in India have remained more or less the same over the past decade. Times have changed and retail traders and investors have become smarter about managing their trades and money. Modern traders & investors require an online trading platform that helps them keep up with the technological advancements of our time.

That's why we're building Dhan - to help you trade, to help you invest, and to help you participate in India's growth stock via the stock market with awesome features and an incredible experience.

We are doing so by giving you access to not just one but 6 products within the Dhan ecosystem:

Dhan App: The only online trading app you need for buying and selling equity, futures, options, commodity, and currency.
Dhan Web: Trade on the big screen across segments with our web trading platform.
Options Trader App: A dedicated option trading app built for India's F&O traders.
Options Trader Web: Love big screens and F&O trading? Use our web option trading platform.
Dhan + TradingView: The magic of Tradingview charts for free with the Lightning-Fast experience of Dhan on tv.dhan.co.
Connect to TradingView: Our Tradingview broker integration allows you to trade in Stocks, Futures, and Commodities directly from tradingview.com via Dhan.

This means that with Dhan, you'll be able to start:

Lakhs of users already trust Dhan for their online stock trading and investing needs. Dhan is growing rapidly because of the love we receive from SuperTraders and Long-Term Investors who acknowledge that the platform is innovating for them, building super useful features that help them do everything from investing in stock market to trading F&O like a pro on the Tradingview charts and much more.

While we are growing, we will always remember why we started building in the first place - you. Our user-first approach will always be at the heart of our philosophy. Come join us on this incredible journey!

Try it out, you can close your account at anytime using this link.

SEBI Stock Broker Registration No: INZ000006031 | Depository Participant (CDSL) ID: IN-DP-289-2016 | SEBI Research Analyst Registration No: INH000023357
Exchange Membership No. : NSE: 90133 | BSE: 6593 | MCX: 56320
Registered & Corporate Office: Unit No. 2201, 22nd Floor, Gold Medal Avenue, S.V. Road, Beside Patel Petrol Pump, Piramal Nagar, Goregaon West, Mumbai – 400104, Customer Care: 9987761000.

Details of client bank account

For any query / feedback / clarifications, email at help@dhan.co.

In case of grievances for any of the services rendered by Raise Securities Private Limited, please write to grievance@dhan.co (for NSE, BSE and MCX) or grievancedp@dhan.co (for Depository Participant). Please ensure that you carefully read the Risk Disclosure Document as prescribed by SEBI, our Terms of Use and Privacy Policy. Compliance Officer: Mr. Manish Garg and Mobile: 8655740961 Email: complianceofficer@dhan.co To lodge your complaints using SEBI SCORES, click here.

Disclaimer: All communications with the client via chat, phone, or email are for support purposes only. Any commitments or statements made by the agent (human or virtual) shall not be binding on the company.

DHAN is a brand owned by Raise Securities Private Limited. All DHAN clients are registered under Raise Securities Private Limited. Clients are advised to refer to our company as Raise Securities Private Limited when communicating with regulatory authorities.

Procedure to file a complaint on SEBI SCORES: Register on SCORES portal. Mandatory details for filing complaints on SCORES: Name, PAN, Address, Mobile Number, E-mail ID. Benefits: Effective Communication, Speedy redressal of the grievances. You may refer the website https://scores.sebi.gov.in/ for more information. You may also download the SEBI Scores app to log a complaint Android: https://play.google.com store apps sebiscores iOS: https://apps.apple.com app sebiscores.

Disclaimer: Investment in the securities market are subject to market risks, read all the related documents carefully before investing. Brokerage will not exceed the SEBI prescribed limit

Attention investors:

Stock brokers can accept securities as margins from clients only by way of pledge in the depository system w.e.f September 01, 2020.
Update your e-mail and phone number with your stock broker / depository participant and receive OTP directly from depository on your e-mail and/or mobile number to create pledge.
Check your securities / MF / bonds in the consolidated account statement issued by NSDL/CDSL every month.

Note: As a policy we do not give stock tips or recommendations and have not authorized anyone to give this on behalf of us. If you know anyone claiming to be a part of Dhan / / Raise or our associate companies or partners and offering such services, please report us on help@dhan.co. Important Information for Investors: To prevent unauthorized transactions in your trading / demat account, do not share your account details, credentials or any personal details with anyone. Keep your mobile number updated with your Stock Broker, Depository Participant and ensure that the same is registered with Stock Exchanges, Depository and KRAs. You will receive alerts and information on your registered mobile number / email for debit and other important transactions in your demat account directly from CDSL / Exchange on the same day. KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (Stock Broker, DP, Mutual Fund, etc.), you need not undergo the same process again when you approach another intermediary. No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account. This is issued in the interest of investors.

Investors should be cautious on unsolicited emails and SMS advising to buy, sell or hold securities and trade only on the basis of informed decision. Investors are advised to invest after conducting appropriate analysis of respective companies and not to blindly follow unfounded rumours, tips etc. Further, you are also requested to share your knowledge or evidence of systemic wrongdoing, potential frauds or unethical behaviour through the anonymous portal facility provided on BSE & NSE website. Issued in the interest of the investors.

Raise Securities Private Limited also known as Dhan is only an order collection platform that collects orders on behalf of clients and places them on BSE StarMF for execution. Client expressly agrees that Dhan is not liable or responsible and does not represent or warrant any damages regarding non- execution of orders or any incorrect execution of orders with regard to the funds chosen by the client or due to, but not being limited to, any link/system failure, delay in transfer of the funds on account of any unforeseen circumstances/issues in the banking system/payment aggregators or any other problems that may result in a delay in crediting the funds into the BSE Star MF's bank account. Raise Securities Private Limited (Dhan) does not engage in proprietary trading on its own account.

Mutual fund investments are subject to market risks, read all scheme related documents carefully before investing. Dhan is not a distributor or agent of any mutual fund. Mutual Funds are not exchange-traded products. Any related disputes will not have access to the Exchange-investor redressal forum or arbitration mechanism. For other disclaimers please refer https://dhan.co/advertisement-disclaimer/

Download client registration documents (Rights & Obligations, Risk Disclosure Document, Do's & Don'ts) in vernacular language: BSE | NSE | MCX

Kindly, read the Advisory Guidelines of BSE | NSE | MCX for investors as prescribed by the exchange with reference to their circular dated 27th August, 2021 regarding investor awareness and safeguarding client's assets

Conservative Mutual Funds

Best Conservative Funds to Invest in 2026

Sorted highest to lowest: 3Y Returns

Returns Calculator Based on Annualised Returns

About Conservative Funds

What are Conservative Funds

Advantages of investing in Conservative Funds

Is it good to invest in Conservative Funds

Who should invest in Conservative Funds

Other Hybrid Funds

Explore Mutual Funds by Types

Open NFOs

Popular Funds

Mutual Fund Calculators

FAQs