Steps to invest in Hybrid Mutual Funds

Mutual funds are becoming a more popular form of investment by the day. One of the reasons is that it is extremely simple to start investing right from the comfort of your home. No longer do you have to wait in lines to manually fill out multiple forms and submit hard copies of countless documents. You can select the type of mutual fund you want to invest in and start a SIP at any time.

One such type of mutual fund that is easy to invest in is a hybrid fund. They invest in equity and debt instruments to help you diversify your portfolio and reduce your risk exposure while giving you the chance to earn higher returns. Whether you are a risk-averse investor or would like stable returns, hybrid mutual funds are the perfect balance of equity and debt mutual funds as they offer the best of both.


Before we get to the steps you must take to invest in hybrid mutual funds, let’s see how the funds work.

How hybrid funds work

When your aim is to accomplish capital appreciation with minimum risk exposure, hybrid mutual funds can be an excellent choice. The fund’s manager will allocate the total amount in specific proportions to different equity and debt instruments, thus taking advantage of fluctuations to buy or sell securities while limiting your exposure to the stock market.

There are various types of hybrid mutual funds you should know about before you start investing, such as:

  • Equity-oriented funds, which invest over 65% of the capital in equity while the rest goes to debt securities.
  • Debt-oriented funds, which invest over 65% of the capital in various debt instruments. These can include debentures, bonds, government securities, treasury bills, and so on.
  • Monthly income plans, which invest primarily in debt securities with 15 to 20% of the capital going towards equity instruments. This helps the funds generate higher returns while providing regular income to investors through dividends.

Steps to invest in hybrid funds

Before you start this process, it’s necessary to decide whether you will be making a lump sum payment or starting a SIP (Systematic Investment Plan). The latter allows you to reduce your risk exposure and to take advantage of rupee-cost averaging as well as the power of compounding.

Here’s how you can start investing:

  1. Create your account on the Tata Capital Moneyfy App.
  2. Fill in all the requested details and verify your information before submitting it.
  3. Complete your online KYC, which takes less than 5 minutes as long as you have your ID proof and other forms in order.
  4. Start researching your preferred hybrid mutual fund and invest in the one that best fits your goals.

With Tata Capital Moneyfy App, you can compare the performance of various funds and start investing in the one (or more) of your choice with as little as Rs. 500. While choosing a fund, do remember to analyze it from multiple perspectives and study all the parameters that indicate whether it’s worth your investment.