New and moderate-risk investors may choose for long-term goals

With markets remaining volatile over the past year, many investors are seeking solutions that combine the benefits of equity exposure for long-term wealth building while also mitigating volatility. Aggressive hybrid funds fit the bill well.

- SARBAJEET K SEN

Over the past year, the Sensex has fallen 3.6 per cent, largecap funds have lost 5.2 per cent, and flexicap funds have declined 5.6 per cent. Aggressive hybrid funds have done a better job than the frontline index and diversified-equity categories by losing only 1.4 per cent.

"Markets have been quite volatile in the past year. Aggressive hybrid funds are better positioned to navigate such volatile and uncertain periods compared to pure equity funds. The allocation to fixed-income securities provides much-needed stability to the overall portfolio. Hence, their draw-downs are relatively less compared to equities," says Harshad Borawake, head of research and fund manager, Mirae Asset Investment Managers (India).