Best Aggressive Hybrid Mutual Funds to Invest in 2022



Many mutual fund advisers recommend aggressive hybrid funds to new and cautious investors. They believe these programs are ideal for these investors to build wealth to achieve their long term financial goals. If you are looking for mutual funds to start investing in this fiscal year, this article may help. Here, we’ll discuss why you should invest in aggressive hybrid funds, the pros and cons of investing in them, and some good aggressive hybrid programs you can consider investing in this new year.

To begin with, what is an aggressive hybrid mutual fund? An aggressive hybrid fund is mandated to invest in a mixture of stocks (or stocks) and debt. According to SEBI standards, these programs are mandated to invest 65 to 80% in equities and 20 to 35% in debt. This mixed portfolio helps to better contain volatility. When the stock market is boiling, the debt part of investments parries the blow. This helps new investors to continue their investments without much hassle.

Another advantage of investing in these plans is again their mixed portfolio of stocks and debt. In order to maintain the asset allocation, the fund manager will consistently record profits, which will increase returns. To explain, suppose the equity allocation has gone beyond the original plan in a bull market. The fund manager would sell the shares to maintain the allocation. This recognition of profits, over a long period of time, would increase returns.

Of course, you can make such an allocation and build your own mutual fund portfolio. However, when you record profit, you may need to pay taxes. A mutual fund, on the other hand, is not required to pay taxes. This would again help investors improve their returns.

However, aggressive hybrid funds have lost some of their luster in recent years. This is mainly due to the fact that many dissatisfied investors, especially retirees, have started investing in aggressive hybrid programs to generate regular income. These plans stopped declaring regular dividends during a bad market phase. In accordance with sebi standards, mutual funds may declare dividends on their realized profits. So when the plan cannot generate a profit, they would stop declaring dividends. As a result, many retirees were dissatisfied with these programs.

Another factor that deprived the popularity of these schemes was the turmoil in the debt market two years ago. Since aggressive hybrid programs invest 35% in debt, many investors were concerned about their investments. Many advisers also felt that fund houses were shifting their bad positions to aggressive hybrid funds. It has also led some investors to avoid these schemes.

Now that you know these patterns, here are the points to remember before deciding to invest in aggressive hybrid funds. First, the blended portfolio of these plans helps you limit volatility and build wealth over a long period of time. Second, regular profit recognition would help these programs increase profits. Third, they provide a tax benefit. Finally, don’t rely on regular dividends from these plans to build up regular income.

If these factors impress you, you may want to consider investing in our recommended aggressive hybrid funds.

Best Aggressive Hybrid Patterns:

  • SBI Hybrid Equity Fund
  • Canara Robeco Hybrid Equity Fund
  • Mirae Asset Hybrid Equity Fund
  • ICICI Prudential Equity and Debt Fund

If you are interested in investing in these programs, you might be interested to know how we chose these programs. Discover our methodology: used the following parameters to prequalify hybrid mutual fund systems.

Average sliding returns: Rolled daily for three years.

Consistency over the past three years: Hurst Exponent, H is used to calculate the consistency of a fund. The exponent H is a measure of the randomness of a fund’s NAV series. Funds with a high H tend to exhibit low volatility compared to funds with a low H.

i) When H = 0.5, the series of returns is called a geometric Brownian time series. These types of time series are difficult to predict.

ii) When H is less than 0.5, the series is said to have mean return.

iii) When H is greater than 0.5, the series is said to be persistent. The larger the value of H, the stronger the trend of the series

The downside risk: We have only considered the negative returns given by the UCITS for this measure.

X = returns below zero

Y = Sum of all squares of X

Z = Y / number of days taken to calculate the ratio

Downside risk = Square root of Z


Share of equity: It is measured by Jensen’s Alpha for the past three years. Jensen’s Alpha shows the risk-adjusted return generated by a mutual fund relative to the expected market return predicted by the Capital Asset Pricing Model (CAPM). A higher Alpha indicates that the performance of the portfolio has exceeded the returns predicted by the market.

Average returns generated by the MF Scheme =

[Risk Free Rate + Beta of the MF Scheme * {(Average return of the index – Risk Free Rate}

Part of the debt: Fund return – Benchmark return. The rolling daily rolling returns are used to calculate the performance of the fund and the benchmark index, then the active performance of the fund.

Asset size: For hybrid funds, the threshold asset size is Rs 50 crore

(Disclaimer: Past performance is no guarantee of future performance.)



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