Mutual Fund: Schemes that give good returns with low risk, top aggressive hybrid funds gave up to 30% annual return in 5 years

Why Invest in Aggressive Hybrid Funds during Market Volatility:Amidst the turmoil in the market, it becomes difficult for investors to choose the right option for investing in equity. But in such times, aggressive hybrid funds can be an attractive option. These funds have the potential to give high returns to investors. The special thing is that investing in aggressive hybrid funds is considered less risky than pure equity funds.

What are Aggressive Hybrid Funds?

Aggressive hybrid funds are a category of hybrid mutual funds that invest 65% to 80% of the funds in equities and the rest in debt assets. In most aggressive hybrid funds, fund managers invest 70-75% of the funds in equities and the remaining 25-30% in debt. These funds provide stability during more volatile periods in the market and protect investors from major losses.

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Why are aggressive hybrid funds the right choice?

1. Possibility of high returns:Aggressive Hybrid Funds offer investors an opportunity to take advantage of market upside while providing a safety net to mitigate losses.

2. Risk Management: Managing risk should be a major issue for investors during the volatility in the market. Fund managers of aggressive hybrid funds do asset allocation based on market conditions and maintain diversification in the portfolio.

3. Defensive Portfolio: A large portion of Aggressive Hybrid Funds is invested in equities, but depending on the market conditions, investment is made in companies which are considered more safe and stable.

4. Tax Benefits: More than 65% of the corpus of aggressive hybrid funds is invested in equity, due to which they are placed in the category of equity funds for taxation purposes. Therefore, investing in them can be a better option for tax saving purposes.

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Past Performance of Aggressive Hybrid Funds

According to data, during the last four years, most aggressive hybrid funds have kept about 70% of their investments in equity. Due to this, these funds have given good returns and in many cases have performed better than large cap funds.

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Top Aggressive Hybrid Funds and their 5 Year Returns

Here you can find the last 5 years annualised returns for the Direct and Regular plans of top 5 aggressive hybrid funds:

1. Bank of India Mid & Small Cap Equity & Debt Fund

5-year Average Annual Return (Direct): 30.22%

5 Year Average Annual Return (Regular): 29.00%

Asset Under Management (AUM): Rs 966.18 crore

2.Quant Absolute Fund

5-year Average Annual Return (Direct): 28.62%

5-year Average Annual Return (Regular): 27.17%

Asset Under Management (AUM): Rs 2,292.73 crore

3. JM Aggressive Hybrid Fund

5-year Average Annual Return (Direct): 28.26%

5-year Average Annual Return (Regular): 26.91%

Asset Under Management (AUM): Rs 570.41 crore

4. ICICI Prudential Equity & Debt Fund

5-year Average Annual Return (Direct): 25.04%

5-year Average Annual Return (Regular): 24.37%

Asset Under Management (AUM): Rs 39,859 crore

5. Mahindra Manulife Aggressive Hybrid Fund

5-year Average Annual Return (Direct): 23.84%

5-year Average Annual Return (Regular): 21.58%

Asset Under Management (AUM): Rs 1,423.63 crore

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Keep these 3 things in mind before investing

1. Market Risk: While investing in Aggressive Hybrid Funds, investors should keep in mind that these funds invest heavily in equities, which may increase the risk of losses during market downturns.

2. Risk Profile: Aggressive Hybrid Funds may be suitable for investors whose risk taking capacity can be considered moderate.

3. Long Term Investment: Aggressive Hybrid Funds are better for those investors who want to invest for the long term, because there is a higher possibility of good returns if the investment is maintained for a long time.

(Disclaimer: The purpose of this article is only to provide information, not to give investment advice. The past performance of a mutual fund cannot be considered a guarantee of giving similar returns in the future. Take any investment decision only after consulting your investment advisor.)