What are Aggressive Hybrid Funds?
Aggressive hybrid funds are open-ended hybrid schemes investing predominantly in equity and equity-related instruments with smaller allocation to debt and money market instruments. According to the SEBI guidelines, aggressive hybrid funds have to invest at least 65-80% of their total assets in equity and equity related instruments and 20-35% in debt instruments.
Why Invest in Aggressive Hybrid Funds?
- Provides the advantage of capital appreciation with lower volatility
- Provides a balanced risk-return mix through active diversification across asset debt and equity classes within the specified asset allocation range
- Equity portfolio enhances the returns of the overall fund portfolio while the debt portfolio limits the downside risk and generates stable returns
- Provides an alternative to investing separately in mutual funds belonging to various asset classes
- Reduces the churning cost incurred in managing separate equity and debt funds for asset allocation strategy
- Eliminates the need of market timing for implementing asset allocation strategy
- Benefits by booking profits in equity portfolios during rising equity markets and by increasing equity allocation during falling markets
- Provides higher tax efficiency than manual rebalancing of equity and debt fund exposure done by the investor themselves.
Also Read: Best Balanced Advantage Funds
Table of Best Aggressive Hybrid Funds
| Fund Name | Returns (%) | |||
| 1 year | 3 year | 5 year | 10 year | |
| JM Aggressive Hybrid Fund | -6.26 | 22.07 | 22.02 | 13.76 |
| Bank of India Mid & Small Cap Equity & Debt Fund | -3.37 | 20.35 | 23.94 | — |
| ICICI Prudential Equity & Debt Fund | 5.15 | 19.95 | 24.78 | 17.05 |
| Edelweiss Aggressive Hybrid Fund | 3.14 | 19.22 | 21.28 | 14.41 |
| Mahindra Manulife Aggressive Hybrid Fund | 3.30 | 18.48 | 21.58 | — |
| Invesco India Aggressive Hybrid Fund | 3.71 | 18.09 | 17.70 | — |
| UTI Aggressive Hybrid Fund | 0.29 | 16.68 | 19.82 | 13.16 |
| DSP Aggressive Hybrid Fund | 4.23 | 16.61 | 17.55 | 13.81 |
| Bandhan Aggressive Hybrid Fund | 6.29 | 16.50 | 19.09 | — |
| HSBC Aggressive Hybrid Fund | 1.27 | 16.44 | 16.81 | 12.42 |
Data as on August 26, 2025
Risks of Investing in Aggressive Hybrid Funds
- Risk profile is positioned between that of pure equity funds and pure debt funds as aggressive hybrid funds have a larger allocation towards equity and a small exposure to debt
- Exposed to interest rate risk, credit risk, liquidity risk or reinvestment risk faced by the debt funds or other instruments in the fixed income asset class
- Exposed to usual market risks and risk of capital erosion risks faced by equity funds
Who Should Invest in Aggressive Hybrid Funds?
- Investors with investment horizon of 3+ years
- Those seeking to participate in growth potential of equity markets with reduced downside risk
- Those seeking long term capital appreciation along with accrual income
- Those seeking long term capital appreciation with lower volatility than in equity funds
- Those seeking to benefit from both equity and debt across market cycles
- Those seeking automatic asset allocation through a single mutual fund scheme