Aggressive Hybrid Fund

September 20, 2023

Aggressive Hybrid Fund

An aggressive hybrid fund is a type of mutual fund that invests a major part of its assets into stocks (up to 80%) and the remaining part into debt instruments (up to 20%). In other words, This type of mutual fund combines the strategy of both equity mutual fund and debt mutual fund.  


Aggressive Hybrid Fund Meaning

Aggressive hybrid funds primarily invest in stocks with a smaller allocation toward debt instruments. SEBI permits up to 80% investment in equities, but the fund manager adjusts allocations based on market conditions, shifting towards stocks or debt as needed.

For example, if the stock market sentiment is positive, the fund manager can increase the allocation toward stocks. On the other hand, when the stock market sentiment is negative or not performing well, the fund manager can increase the allocation toward debt instruments. 

The equity component is meant to provide capital appreciation, while the debt component provides stability to the portfolio. This helps reduce the fund’s overall risk while still providing the potential for higher returns than traditional debt funds. Since the equity allocation is higher in aggressive hybrid funds, they are considered more suitable for investors with a higher risk appetite and a longer investment horizon. 

Aggressive Hybrid Fund: Benefits

The main benefit of hybrid funds is their flexibility to take advantage of market opportunities. The allocation of funds ranges between 60% to 80% in equities, while a minimum of 20% is allocated towards debt instruments. This flexibility allows the fund manager to adjust the allocation between equity & debt depending on market conditions, potentially leading to higher returns and lower risk.

The other benefits of aggressive hybrid funds are given below: 

  • Diversification 

Investing in aggressive hybrid funds gives diversification benefits as they invest in equity and debt instruments. This allocation allows for a good balance between growth and stability, as the equity portion provides the potential for capital appreciation while the debt portion helps to limit downside risk. 

  • Professional management

Aggressive hybrid mutual funds are managed by professional fund managers with expertise and years of experience managing funds. These fund managers use their knowledge and skills to analyze market trends and identify potential investment opportunities. 

  • Rebalancing 

The best thing about aggressive hybrid funds is that they vigorously keep rebalancing their asset allocation according to the market conditions. When the equity market is rising, they tend to increase their allocation toward equity. On the other hand, when the equity market is volatile, they increase their allocation to debt instruments. 

Aggressive Hybrid Fund Vs Multicap Fund

The main difference between aggressive hybrid funds and multi-cap funds is that aggressive hybrid funds split their investments between equity and debt, often holding a larger share in equities (around 65-80%). In contrast, multi-cap funds spread their investment, at least 25% each, across large, mid, and small-cap stocks.

Factors Aggressive hybrid fund Multi cap fund 
Returns Moderate to highModerate to high
Risk ModerateModerate to high
Suitable for Investors with a moderate risk profile looking for a mix of equity and debt exposureInvestors with a moderate to high-risk profile looking for equity exposure across different market capitalizations
Diversification Offers diversification benefits as the fund invests in both equity and debt securitiesOffers diversification benefits as the fund invests in stocks across different market capitalizations, providing exposure to various sectors and companies.

Aggressive Hybrid Fund Returns

On average, Aggressive Hybrid Funds have delivered an annualized return of 10.9% over the past five years. These funds have also shown an annualized return of 21.67% over the last 3 years and an annualized return of 13.94% over the last 10 years. These figures suggest that aggressive hybrid funds can potentially provide investors with relatively higher returns over the long term, but past performance does not guarantee future performance. 

Aggressive Hybrid Fund: How to Invest

You can invest in aggressive hybrid mutual fund via Alice Blue. If you don’t have a Demat account, open your account in 15 minutes today and begin your investment journey. Here are the steps to invest in an aggressive hybrid fund are: 

Understand your investment goals

Start by identifying your investment objectives, whether they are long-term wealth creation, retirement planning, or any specific financial goal. Determine your risk tolerance to help you choose an appropriate investment strategy.

Decide whether you want to invest in direct or regular mutual funds

Mutual funds can be bought directly from Alice Blue. Direct plans have lower expense ratios as they do not involve distribution commissions, while regular plans include distributor commissions. Decide which option suits your preference and investment style.

Research and select a mutual fund

Conduct thorough research to identify suitable Aggressive Hybrid Funds. Consider factors such as the fund’s historical performance, risk-adjusted returns, investment philosophy, fund manager’s expertise, and investment strategy. To gather information, you can refer to resources like mutual fund websites, financial news platforms, and independent research reports.

Open a Demat account.

A Demat account must hold and trade securities like mutual fund units. Open your Demat account today with Alice Blue. Submit the required documents, such as identity proof, address proof, and a completed application form. Once your account is opened, you will receive a unique Demat account number.

Choose the Mutual Fund

After researching and evaluating various Aggressive Hybrid Funds, select the one that aligns with your investment goals and risk profile. Consider factors such as the fund’s performance track record, asset allocation strategy, expense ratio, fund manager’s experience, and the fund house’s reputation.

Track your investment

Once you have invested in the Aggressive Hybrid Fund, regularly monitor and track its performance. Keep a tab on market conditions, review the fund’s performance reports, and assess whether it is performing in line with your expectations and financial goals. You can track your investment through the fund’s website, mobile apps or by receiving periodic statements from Alice Blue.

Best Aggressive Hybrid Mutual Fund (Data as of 24 April 2023)

The best aggressive hybrid mutual funds are given below: 

Aggressive mutual fund name NAVExpense ratioAUM (Fund Size)Min. Investment
Quant Absolute Fund Direct-Growth₹ 307.590.56%₹ 1,074 CrsSIP ₹1000 &Lumpsum ₹5000
ICICI Prudential Equity & Debt Fund Direct-Growth₹ 263.931.21%₹ 21,436 CrsSIP ₹100 &Lumpsum ₹5000
Kotak Equity Hybrid Fund Direct-Growth₹ 47.220.58%₹ 3,327 CrsSIP ₹1000 &Lumpsum ₹5000
Edelweiss Aggressive Hybrid Fund Direct-Growth₹ 45.160.36% ₹ 496 CrsSIP ₹500 &Lumpsum ₹5000
HDFC Hybrid Equity Fund Direct Plan-Growth₹ 91.741.09% ₹ 18,858 CrsSIP ₹100 &Lumpsum ₹100
UTI Hybrid Equity Fund Direct Fund-Growth₹ 278.131.35%₹ 4,283 CrsSIP ₹500 &Lumpsum ₹1000
Baroda BNP Paribas Aggressive Hybrid Fund Direct-Growth₹ 20.640.61%₹ 781 CrsSIP ₹500 &Lumpsum ₹5000
Mirae Asset Hybrid Equity Fund Direct-Growth₹ 25.150.43%₹ 6,949 CrsSIP ₹1000 &Lumpsum ₹5000
Tata Hybrid Equity Fund Direct Plan-Growth₹ 348.961.05%₹ 3,156 CrsSIP ₹500 &Lumpsum ₹5000
Canara Robeco Equity Hybrid Fund Direct-Growth₹ 271.390.66%₹ 8,247 CrsSIP ₹1000 &Lumpsum ₹5000

Aggressive Hybrid Fund Taxation

The tax on hybrid funds depends on the equity-debt split. If more than 65% of a hybrid fund’s assets are in equity, it’s classified as an equity fund for tax purposes. Short-term capital gains (STCG) from selling units within a year are taxed at 15%. Long-term capital gains (LTCG) are taxed on selling after one year at 10%. 

Do you want to expand your knowledge about mutual funds? We’ve got a list of must-read blogs that will help you do just that. Just click on the articles to find out more.

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Aggressive Hybrid Fund – Quick Summary

  • Aggressive hybrid funds are mutual funds that invest in a mix of equity and debt instruments. The maximum allocation toward equity is 80%, and the minimum allocation toward debt instruments is 20%. 
  • Investing in an aggressive hybrid fund is the best way to invest in two asset classes simultaneously. They have the potential to help you earn high returns and are suitable for investors with a higher risk appetite and a longer investment horizon.
  • Aggressive hybrid mutual funds have the flexibility to take advantage of market opportunities. The allocation of this fund ranges between 60% to 80% in equities and equity-linked instruments, while a minimum of 20% is allocated towards debt instruments. 
  • The equity portion of the portfolio of an aggressive hybrid fund is generally higher than the debt portion. On the other hand, multi-cap funds invest a minimum of 25% each in large-cap, mid-cap, and small-cap stocks.
  • Aggressive Hybrid Funds have delivered an annualized return of 10.9% over the past 5 years. 
  • To invest in an aggressive hybrid fund, open a Demat account with Alice Blue, complete the KYC process, select a scheme, fill up the application form, make payment, and receive confirmation of your investment.
  • When investing in any mutual fund, it is important to consider factors such as the fund’s performance, expense ratio, asset allocation, investment strategy, and fund manager’s track record before making a decision.
  • The best aggressive hybrid funds are Quant Absolute Fund Direct-Growth, ICICI Prudential Equity & Debt Fund Direct-Growth, Kotak Equity Hybrid Fund Direct-Growth, HDFC Hybrid Equity Fund Direct Plan-Growth, Canara Robeco Equity Hybrid Fund Direct-Growth. 
  • If you redeem the aggressive hybrid fund’s units before 1 year, the interest earned on your investment is considered STCG (short-term capital gain) and is taxed at 15%. And if you redeem the fund’s units after 1 year, the interest earned is considered LTCG (long-term capital gain), and it is taxed at 10%.

Frequently Asked Questions

1. What Is An Aggressive Hybrid Mutual Fund?

An aggressive hybrid mutual fund is a type of fund that invests mainly in equity and the remaining assets in debt instruments. As per SEBI, Aggressive funds can invest up to 80% of their capital in stocks. 

2. Is It Good To Invest In Aggressive Hybrid Mutual Funds?

Aggressive hybrid mutual funds appeal to bold investors due to their large equity component. However, their high exposure to stocks introduces significant risk, which might not align with the financial goals or risk tolerance of more conservative investors.

3. Are Aggressive Hybrid Mutual  Funds Safe?

Aggressive hybrid funds are highly risky investments because of their higher allocation in equities. So, investing in this type of fund is not advisable for investors with a low-risk appetite. To decide whether this fund is suitable or not, make sure to consider your risk appetite. 

4. What Is The Exit Load For Aggressive Hybrid Mutual Fund?

Exit load is charged when investors redeem the funds before completing one year. The exit load can be different depending on the fund houses. However, As per SEBI, the exit load on hybrid mutual funds is around 1%. 

5. What Are The Benefits Of Aggressive Hybrid Mutual Mutual Funds?

Aggressive hybrid mutual funds invest in high-return assets. Hence, investing in aggressive hybrid mutual funds helps you earn high returns. Also, there is a high risk involved. Research the fund’s objectives and the fund manager’s experience properly. 

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