Is LIC MF Debt Hybrid Fund a buy?

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About LIC Mutual Fund House

LIC Mutual Fund was established on 20th April 1989 by LIC of India. Being an associate company of India’s premier and most trusted brand, LIC Mutual Fund is one of the well-known players in the asset management sphere.

The company has strong parentage of LIC which had helped it grow initially, but the company has been losing its market share over the years to its competitors.

Market share of company (% of total industry AUM)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020  
5.7% 1.6% 1% 0.9% 1.2% 0.8% 1.0% 1.2% 0.9% 0.6% 0.6%  

About LIC Mutual Fund Debt Hybrid Fund

The fund has 18.54% investment in Indian stocks of which 13.87% is in large cap stocks, 3.03% is in mid cap stocks, 0.46% in small cap stocks. Fund has 78.73% investment in Debt of which 71.8% in Government securities, 6.93% in funds invested in very low risk securities. It is a conservative debt hybrid fund where it has the asset allocation mandate as follows –

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(Source – LICMF.com)

Conservative hybrid funds invest roughly a quarter of your money in equity shares and the rest in bonds.

A ₹10,000 investment 5 years ago would now be worth ₹13569 today & ₹1000 monthly SIP for last 5 years your ₹60,000 would have been ₹69940 (As on 25 September, 2020). – (Source: moneycontrol)

Also Read: Is Axis Long Term Equity fund a buy?

Investment Philosophy

The investment objective of the Scheme is to

  • Generate regular income by investing mainly in a portfolio of quality debt securities and money market instruments.
  • It also seeks to generate capital appreciation by investing some percentage in a mix of equity instruments.

Fund Manager

  1. Marzban Irani –

Education: Mr. Irani is a B.Com (H) from Mumbai University and holds a PGDBM from Chetna’s Institute of Management & Research, Mumbai.

Experience: Prior to joining LIC Mutual Fund he was associated with DSP Investment Managers (Jun 2014-Jul 2016) as VP Fixed Income, Tata Asset Management (Jun 2011-May 2014) as Senior Fund Manager Fixed Income, PNB MetLife India Insurance (Sep 2010-May 2011) as Fund Manager Fixed Income, Mirae Asset Global Investment Management India Pvt. Ltd. (Jan 2008-Jul 2010) as Fund Manager Fixed Income and Tata Asset Management Limited (Sep 2000-Nov 2007) as Fund Manager Fixed Income.

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Other Funds Managed: LIC MF Banking & PSU Debt Fund ,LIC MF Bond Fund ,LIC MF Children’s Gift Fund, LIC MF Equity Hybrid Fund ,LIC MF Government Securities Fund ,LIC MF Government Securities Fund – Provident Fund, LIC MF G-Sec Long Term Exchange Traded Fund ,LIC MF Unit Linked Insurance ,LIC MF Arbitrage Fund ,LIC MF Short Term Debt Fund

Education: Mr. Patil is an MBA (Finance).

Experience: Prior to joining LIC Mutual Fund, he has worked with Canara Robeco Mutual Fund, Sahara Mutual Fund and Religare Enterprise Limited.

Other Funds Managed: LIC MF Banking & Financial Services Fund ,LIC MF Children’s Gift Fund, LIC MF Equity Hybrid Fund ,LIC MF Multicap Fund, LIC MF Arbitrage Fund ,LIC MF Infrastructure Fund ,LIC MF Large Cap Fund, LIC MF Large & Mid Cap Fund ,LIC MF Tax Plan, LIC MF Unit Linked Insurance

Returns of LIC Debt Hybrid Fund

One-time investment return (absolute)

Period (Returns (in %) 1 Year 3 Year 5 Year 10 Year
LIC MF Debt Hybrid Fund – Growth 6.35% 18.14% 35.69% 81.58%
Canara Robeco Conservative Hybrid Fund – Regular Plan – Growth – 9.95% 22.49% 42.15% 121.17%
BOI AXA Conservative Hybrid – Regular Plan – Growth – 9.43% 0.12% 22.62% 80.87%
BNP Paribas Conservative Hybrid Fund – Direct Plan – Growth – 6.52% 22.56% 53.06%

(SOURCE – moneycontrol, As on 26-9-20)

(SOURCE – valueresearch)

SIP returns (absolute)

Period (Returns (in %) 1 Year 3 Year 5 Year 10 Year
LIC MF Debt Hybrid Fund – Growth 3.26% 9.94% 16.57% 40.50%
Canara Robeco Conservative Hybrid Fund – Regular Plan – Growth – 5.89% 14.42% 22.25% 54.27%
BOI AXA Conservative Hybrid – Regular Plan – Growth – 6.51% 1.58% 5.83% 30.73%
BNP Paribas Conservative Hybrid Fund – Direct Plan – Growth – 3.58% 11.60% 22.45%

(SOURCE – moneycontrol, As on 26-9-20)

Portfolio of LIC MF Debt Hybrid Fund

(Source – LICMF)

(SOURCE – valueresearch)

TOP 10 EQUITY HOLDINGS
Company Sector % Assets
Infosys Technology 3.52
ICICI Bank Financial 3.04
L&T Infotech Technology 1.67
Hindustan Unilever FMCG 1.57
Nestle India FMCG 1.55
Reliance Industries Energy 1.31
HDFC Bank Financial 1.13
Sanofi India Healthcare 0.95
Tech Mahindra Technology 0.94
Mahindra & Mahindra Automobile 0.75

(SOURCE – valueresearch)

Top Debt Holdings
Company Instrument Credit Rating % Assets
7.32% GOI 28/01/2024 GOI Securities SOV 48.05
Reserve Bank of India 91-D 10/09/2020 Treasury Bills SOV 18.93
8.29% State Bank of India 22/01/2025 Debenture AAA 6.85
6.18% GOI 2024 GOI Securities SOV 3.26
8.30% GOI 2040 Central Government Loan SOV 0.89
7.26% GOI 14/01/2029 GOI Securities SOV 0.67
8.49% NTPC 25/03/2025 Bonds/NCDs AAA 0.08

(SOURCE – valueresearch)

Expense Ratio

  Expense ratio (Regular) Expense ratio (Direct)
LIC MF Debt Hybrid Fund – Growth 2.25% 1.27%
Canara Robeco Conservative Hybrid Fund – Regular Plan – Growth 1.95% 0.80%
BOI AXA Conservative Hybrid – Regular Plan – Growth – 2.32% 1.72%
BNP Paribas Conservative Hybrid Fund – Direct Plan – Growth – 2.18% 0.73%

(SOURCE – valueresearch)

Should I Invest in LIC MF Debt Hybrid Fund?

  • The fund is suitable for those who cannot withstand too much volatility in the value of their investments and are content with moderate returns which are slightly higher than returns from fixed income options.
  • You should invest only if your investment horizon is 3 years or more as fund manager has discretion over the allocation within debt & equity which leads to outperformance/ underperformance of a particular fund.
  • The fund has remained in middle compared to peers in its performance which might be due to timing call which needs to be taken while allocating to debt or equity. It has suitable option as a strong parentage with experienced fund managers.

Similar Mutual Funds

Canara Robeco Conservative Hybrid Fund – Regular Plan – Growth –

The fund has 22.04% investment in Indian stocks of which 11.85% is in large cap stocks, 5.05% is in mid cap stocks, 2.11% in small cap stocks. Fund has 68.36% investment in Debt of which 27.36% in Government securities, 41% in funds invested in very low risk securities. The fund is jointly managed by Mr. Miyush Gandhi & Mr. Avnish Jain.

Also Read: Is Canara Robeco Equity Diversified Fund a good investment?

Mr. Gandhi is Bachelor of Commerce & Master of Business Administration. Prior to joining Canara Robeco Mutual Fund he has worked with SBI Life Insurance Company Ltd. as Fund Manager and Research Analyst.

Mr. Jain is a B.Tech from IIT Kharagpur and Post Graduate from IIM Kolkata. Prior to joining Canara Robeco AMC he has worked with ICICI Prudential AMC, PGIM India Mutual Fund, Deutsche Asset Management, Misys Software Solutions, Yes Bank and ICICI Bank.

A ₹10,000 investment 5 years ago would now be worth ₹14214 today & ₹1000 monthly SIP for last 5 years your ₹60,000 would have been ₹73347 (As on 25 September, 2020)

(Source: moneycontrol)

BOI AXA Conservative Hybrid – Regular Plan – Growth –

The fund has 23.9% investment in Indian stocks of which 11.8% is in large cap stocks, 4.49% is in mid cap stocks, 4.93% in small cap stocks. Fund has 55.59% investment in Debt of which 13.18% in Government securities, 42.41% in funds invested in very low risk securities.

The fund is managed by Mr. Alok Singh. Mr. Singh is a CFA and PGDBA from ICFAI Business School and prior to joining BOI AXA AMC he has worked with BNP Paribas Asset Management and Axis Bank.

A ₹10,000 investment 5 years ago would now be worth ₹12262 today & ₹1000 monthly SIP for last 5 years your ₹60,000 would have been ₹63500 (As on 25 September, 2020)

(Source: moneycontrol)

BNP Paribas Conservative Hybrid Fund – Direct Plan – Growth –

The fund has 23.54% investment in Indian stocks of which 16.3% is in large cap stocks, 3.74% is in mid cap stocks, 1.01% in small cap stocks. Fund has 59.43% investment in Debt of which 38.36% in Government securities, 21.07% in funds invested in very low risk securities. The fund is managed jointly by Mr. Abhijeet Dey & Mr. Karthikraj Lakshmanan.

Mr. Dey holds a B.E. (Mechanical and Masters degree in Management Studies from Sydenham Institute of Management & Entrepreneurship Education, Mumbai University. Prior to joining BNP Paribas Mutual Fund he has worked with Kotak Mutual Fund, Frost & Sullivan India as an automotive industry analyst, India Infoline as an equity research analyst.

Mr. Lakshmanan is Commerce Graduate, PGDBM (from SPJIMR, Mumbai), CA and has cleared CFA Level 3 (US CFAI). Prior to joining BNP Paribas AMC (Jul 14, 2008), he was associated with ICICI Prudential AMC as Senior Research Analyst (Mar 9, 2007-Jul 10, 2008), Goldman Sachs Services Pvt. Ltd. as Business Analyst (Apr 3, 2006-Mar 6, 2007) and with ICICI Bank as Management Trainee.

A ₹10,000 investment 5 years ago would now be worth ₹15307 today & ₹1000 monthly SIP for last 5 years your ₹60,000 would have been ₹73471 (As on 25 September, 2020)

(Source: moneycontrol)



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Prateek Goel
Co-founder of Investeek, Prateek has been investing in the stock markets since 2006 and has beaten the NSE/BSE on a consistent basis. At the age of 24, he was also featured in India Today for his expert insight on gold trading.
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