Mutual Funds Day 33: Aggressive Hybrid Funds

In the last Chapter, we learned about balanced advantage funds. The next category is called Aggressive Hybrid Funds. A mutual fund with an equity exposure between 65% to 80% and a debt exposure between 35% to 20% is called an aggressive hybrid fund.

Since aggressive funds have a higher equity exposure, theoretically they will outperform balanced and conservative funds. Finally what matters is how well the equity markets are doing. For a country like India, where the consumption, infrastructure, and investments are expanding — the base narrative that the “growth story is intact” is getting sold and people expect the equity markets to do well.

I prefer hybrid funds to pure equity as the debt exposure gives a sense of security. However, if the markets are falling very badly, then the hybrid funds will not give real protection, only a pure debt fund can do that. Hybrid funds compromise growth and security and we entrust a fund manager to switch as and when required.

Examples:

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