The NFO opened on August 10 and will remain open until August 24.
The scheme is designed to invest only in equity and debt instruments and does not use arbitrage strategies.
The fund can allocate 40% to 60% of its assets to equity and equity-related instruments, including REITs. The remaining 40% to 60% can go into debt securities, securitised debt, debt derivatives and money market instruments.
This gives the scheme flexibility to move between the two asset classes while maintaining a balanced hybrid structure. The fund house says the approach is intended to combine participation in equity markets with exposure to fixed-income assets.
Overseas exposure allowed
The scheme can also invest in overseas securities, including foreign equities, ADRs, GDRs, overseas ETFs and debt securities, subject to regulatory limits.
Its overall overseas investment can be up to 35% of net assets. Within the limits prescribed for overseas investments, the scheme can invest up to $25 million in overseas securities and $10 million in overseas ETFs.
Separate managers for equity and debt
SBI Mutual Fund has assigned separate managers to the two parts of the portfolio.
Tanmaya Desai will manage the equity allocation, while Rajeev Radhakrishnan, CIO and Head of Research – Fixed Income, will manage the debt portfolio.
The fund will use the Nifty 50 Hybrid Composite Debt 50:50 Index as its benchmark.
The scheme’s stated objective is to generate long-term capital appreciation and income through investments in equity and debt. However, the actual returns will depend on market performance and the portfolio allocation adopted by the fund.
Investment and exit-load structure
The minimum investment during the NFO is ₹5,000, with additional investments allowed from ₹1,000.
The scheme has a differentiated exit-load structure. Investors can redeem up to 10% of the units purchased or switched in within one year without an exit load. A 1% exit load will apply if the redemption exceeds that limit during the first year.
There is no exit load on redemptions after one year.
The SBI Balanced Hybrid Fund is therefore positioned between pure equity and conventional debt funds, with the ability to maintain a meaningful allocation to both asset classes. Investors should also account for the market risks associated with both portions of the portfolio, as the scheme does not assure or guarantee returns.