Hybrid Funds

Hybrid funds are mutual funds that invest in a mix of equities and income securities like bonds and treasury bills. Hybrid funds are preferred by investors who wish to balance between high risk – high returns of equity and the lower risk , lower return regime of bonds. The fund house automatically balances the allocation between equity and debt.



Benefits Of Hybrid Mutual Funds

The benefits of hybrid mutual funds are many:

1. Expertise: The fund manager is actively looking at the market and taking a call based on the stocks and money market situation, in varying proportions based on fund investment objective. If it is equity-oriented fund exposure to equity will be more and if it is debt-oriented fund exposure to debt will be higher. Thus, your money is actively managed and allocated by the fund manager

2. Diversification: Since the money cannot be invested in any one organization or group of organizations or industry, the benefit of diversification or the spreading of risks, reduces the risk.

3. Liquidity: Money can be withdrawn any day. No questions asked.

4. Tax Efficient: Existing tax laws are skewed in favour of mutual funds compared to the interest on Bank Fixed deposits. This is true for debt oriented mutual funds.

How is it different from investing in equities and bonds directly?

Hybrid Mutual Funds allow diversification within the equity and debt markets. Whereas you’re risking your money on one particular company when you buy their stocks bonds, a hybrid mutual fund is a pooled investment.


Who should invest in Hybrid Mutual Funds?

Almost everybody can invest in hybrid funds. If you have financial goals that are approaching in a few years, hybrid funds are a good option to consider.
Those looking for a ‘pension’ income should not consider hybrid funds solely for such a purpose. Many hybrid funds were aggressively sold (or mis-sold) promising pension income. But they ended up dipping into the capital when markets took a hit.
One must also be careful about investing in dividend bearing schemes of hybrid funds given the significant dividend distribution tax involved.


How long should I stay invested for?

Hybrid mutual funds are a good asset category for cushioning your portfolio against shocks. You can consider a time horizon of 3 to 7 years on these investments.


How much should I invest in hybrid funds?

There cannot be a generalized asset allocation for one and all. A professional investment advisor such as a Registered Investment Advisor (RIA) will help you arrive at the right allocation. RIAs are registered with the Securities & Exchange Board of India (SEBI) and play a fiduciary role. This means that they are focused on giving you right interest for a fee. It is illegal for them to make any commission income on your hybrid fund investments.


How should one invest in Hybrid Funds?

You can invest in hybrid mutual funds by choosing any of the fund categories listed below. Then entire process is seamless and can be done in minutes.
You can take the advice of a SEBI Registered Investment Advisor to help you select the right hybrid fund. Out here at Jamā we have a list of hybrid funds carefully selected by SEBI RIAs that does this work for you. They also track the performance of the funds and ensure that these investments are 100% aligned to your life goals.



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Invest in Hybrid Mutual Funds

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Benefits Of Hybrid Mutual Funds

The benefits of hybrid mutual funds are many:

1. Expertise: The fund manager is actively looking at the market and taking a call based on the stocks and money market situation, in varying proportions based on fund investment objective. If it is equity-oriented fund exposure to equity will be more and if it is debt-oriented fund exposure to debt will be higher. Thus, your money is actively managed and allocated by the fund manager

2. Diversification: Since the money cannot be invested in any one organization or group of organizations or industry, the benefit of diversification or the spreading of risks, reduces the risk.

3. Liquidity: Money can be withdrawn any day. No questions asked.

4. Tax Efficient: Existing tax laws are skewed in favour of mutual funds compared to the interest on Bank Fixed deposits. This is true for debt oriented mutual funds.

How is it different from investing in equities and bonds directly?

Hybrid Mutual Funds allow diversification within the equity and debt markets. Whereas you’re risking your money on one particular company when you buy their stocks bonds, a hybrid mutual fund is a pooled investment.


Who should invest in Hybrid Mutual Funds?

Almost everybody can invest in hybrid funds. If you have financial goals that are approaching in a few years, hybrid funds are a good option to consider.
Those looking for a ‘pension’ income should not consider hybrid funds solely for such a purpose. Many hybrid funds were aggressively sold (or mis-sold) promising pension income. But they ended up dipping into the capital when markets took a hit.
One must also be careful about investing in dividend bearing schemes of hybrid funds given the significant dividend distribution tax involved.


How long should I stay invested for?

Hybrid mutual funds are a good asset category for cushioning your portfolio against shocks. You can consider a time horizon of 3 to 7 years on these investments.


How much should I invest in hybrid funds?

There cannot be a generalized asset allocation for one and all. A professional investment advisor such as a Registered Investment Advisor (RIA) will help you arrive at the right allocation. RIAs are registered with the Securities & Exchange Board of India (SEBI) and play a fiduciary role. This means that they are focused on giving you right interest for a fee. It is illegal for them to make any commission income on your hybrid fund investments.


How should one invest in Hybrid Funds?

You can invest in hybrid mutual funds by choosing any of the fund categories listed below. Then entire process is seamless and can be done in minutes.
You can take the advice of a SEBI Registered Investment Advisor to help you select the right hybrid fund. Out here at Jamā we have a list of hybrid funds carefully selected by SEBI RIAs that does this work for you. They also track the performance of the funds and ensure that these investments are 100% aligned to your life goals.



Start Investing





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