{"id":20666,"date":"2021-07-06T05:54:56","date_gmt":"2021-07-06T05:54:56","guid":{"rendered":"https:\/\/www.tatacapital.com\/blog\/?p=20666"},"modified":"2025-09-24T06:29:44","modified_gmt":"2025-09-24T06:29:44","slug":"what-are-hybrid-funds","status":"publish","type":"post","link":"https:\/\/www.tatacapitalmoneyfy.com\/blog\/hybrid-funds\/what-are-hybrid-funds\/","title":{"rendered":"What are Hybrid Funds?"},"content":{"rendered":"\n

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So, you\u2019re a budding investor who wants to get a taste of the equity funds market. But, you\u2019re still averse to the market risks this entails. Is there a way to earn high returns without exposing yourself to a high level of risk? Yes! By including hybrid mutual funds in your investment portfolio, you can reduce your risk level while still enjoying handsome returns.<\/p>\n\n\n\n

What are hybrid funds?<\/strong><\/h2>\n\n\n\n

Offering the best of both worlds, hybrid mutual funds invest their assets in both debt-based and equity funds. The purpose of doing so is to ensure that the investor receives higher returns than regular debt funds without facing as much risk as is involved in equity funds.<\/p>\n\n\n\n

The choice of investing in a hybrid fund will depend upon your risk profile and investment objective.<\/p>\n\n\n\n

Additional Read: <\/strong>How and where to keep an Emergency Fund?<\/a><\/p>\n\n\n\n

Types of hybrid funds<\/strong><\/h2>\n\n\n\n

Now that we\u2019ve answered the question, \u201cWhat is hybrid mutual fund?\u201d let us understand its different types. Hybrid funds can be further classified on the basis of asset allocation.<\/p>\n\n\n\n

Debt-oriented hybrid funds<\/strong><\/h3>\n\n\n\n

A hybrid fund is called a debt-oriented fund when more than 65% of its assets are invested in debt-based instruments. These funds are your ideal if you want to ensure stable returns and optimise risk. Debt-oriented hybrid funds are the most suitable for investors with a low-to-moderate risk appetite.   <\/p>\n\n\n\n

Equity-oriented hybrid funds<\/strong><\/h3>\n\n\n\n

Similarly, a hybrid fund is known as an equity-oriented fund when more than 65% of the fund assets are invested in equity shares of a company and the rest in debt funds or other money market instruments. You must invest in these funds if you have a good risk appetite and are aiming at higher returns.<\/p>\n\n\n\n

Additional Read: <\/strong>Investing in different asset classes based on their risk<\/a><\/p>\n\n\n\n

Benefits of investing in hybrid funds<\/strong><\/h2>\n\n\n\n

Hybrid funds offer the following advantages \u2013<\/p>\n\n\n\n