Decks cleared for India's first passive hybrid mutual fund offering

Edelweiss MF announces India's first passive hybrid fund combining equity and government securities, after Sebi allowed the category and a qualifying debt index met AUM norms

Passive offerings by mutual funds (MFs) are set to expand to the hybrid space with Edelweiss MF announcing the launch of Nifty LargeMidcap250 Plus 8-13 yr G-Sec 70:30 Index Fund.

 

The passive space has so far been limited to equity, debt and commodities. The Securities and Exchange Board of India (Sebi) had first announced the plans to allow passive hybrid funds in 2024. While the final guidelines came in December 2025, launches were not possible until recently as no debt index met the regulator’s minimum assets under management (AUM) requirement of ₹5,000 crore. The Nifty 8-13 year G-Sec index is the first constant duration index to cross the threshold. 

The hybrid space is the fastest growing MF segment after precious metal offerings in the past year. Hybrid funds were managing over ₹11 trillion as of February 2026. The passive offerings, according to experts, will have an advantage over the existing active funds on some accounts like lower expense ratio and  transparency.

 

Fund houses can launch up to three passive hybrid funds with varying equity and debt exposure. These include balanced funds (40-60 per cent equity and 40-60 per cent debt), equity-oriented funds (65-80 per cent equity and 20-35 per cent debt), and debt-oriented funds (65-80 per cent debt and 20-35 per cent equity).

 

“It (Nifty LargeMidcap250 Plus 8–13 yr G-Sec 70:30) is the first hybrid passive product in India, combining simplicity and innovation to solve a customer need that has remained unaddressed for decades. With two powerful asset classes and a disciplined allocation framework, this fund can work across market cycles to deliver a smoother investing experience for many investors," said Radhika Gupta, MD & CEO, Edelweiss MF.

 

The scheme is set to launch on March 18.