A comprehensive exploration of aggressive hybrid funds

IN THE COMPLEX LANDSCAPE of investment options, aggressive hybrid funds stand out as a traditional choice for in vestors. These mutual funds, nestled within the hybrid scheme, predominantly invest in stocks while also incorporating a measured allocation in debt instruments. This unique blend positions them as a well-rounded investment avenue, providing a strategic mix of risk and stability.

- K.C. SUNILA

According to SEBI scheme categorisation, aggressive hybrid funds are mandated to maintain a balance, allocating between 65 per cent and 80 per cent of their portfolio to equities and related instruments. The remaining portion finds its place in debt securities. This strategic allocation strategy aims to spread investments across different avenues, mitigating risk and thereby ensuring these funds are less volatile than their pure equity counterparts.

Equity, as an asset class, bears the potential to generate long-term wealth, while debt offers stability and a steady income stream. Aggressive hybrid funds, by combining these elements, strive to deliver the best of both worlds within a single investment product. The equity portion fuels return during market upswings, while the debt component acts as a stabilising force during market downturns, offering a unique dual-role investment proposition.