Aggressive Mutual Funds

Hybrid funds have relatively lower risk as the fund allocation happens in both equity and debt. Investing in these schemes can help you leverage the opportunities for growth and mitigate the risk. 

There are multiple hybrid funds, and an aggressive hybrid fund is one such type. In these funds, there is a fixed ratio of exposure in equity and debt.

Aggressive mutual funds are a scheme where about 65-80% of net assets get invested in equity and equity-related instruments. At the same time, the rest goes towards debt funds to provide a safety net against potential risks. 

With investment in both asset classes, a hybrid aggressive fund offers the best of both in one investment product. Moreover, in these funds, the fund manager has more control over the assets as compared to other balanced hybrid funds. 

With aggressive hybrid mutual funds, many fund managers have the opportunity to take advantage of arbitrage. Arbitrage is a growth strategy that allows fund managers to buy securities at a lower price from one market and sell at a higher price in another. 

The difference in price can result in better returns. Since an aggressive hybrid fund is not a low-risk scheme, fund managers can apply such a strategy that can provide growth while taking controlled risks.

If you are planning to invest in hybrid funds, here are some benefits you get to enjoy:

• You can diversify your portfolio to benefit from both, equity as well as debt funds 

• Fund managers mitigate risk by creating a balance between equity and debt funds after reviewing the market conditions, helping you earn better returns

• Hybrid funds give you the best of both types, as they offer higher returns than debt funds and lower risk than equity funds

• Investing in these funds is suitable for aggressive as well as risk-averse investors

This fund type isn’t for everyone, and here are the types of investors who can consider it. 

• Moderate to Long-Term Investor 

An aggressive hybrid fund has a moderately high risk and is volatile in the short term. As such, it is ideal for investors looking to stay invested for 3 to 5 years. 

• Investors Looking for a Balanced Portfolio 

Since these funds have allocation in multiple asset classes and are moderately high-risk, they can be ideal for investors wanting to balance their portfolio. In fact, investors that have several low-risk instruments should venture into aggressive funds to generate higher returns. 

• Seasoned Investors 

Aggressive funds could lead to capital loss, especially in the first few years. As such, new investors may not have the ability to take on such losses. 

On the other hand, seasoned investors can easily mitigate the risks and adjust to truly leverage the benefits of such funds.  

Keeping the above in mind, you can rely on aggressive hybrid funds to generate wealth in the long run. Aggressive growth mutual funds, like any other funds, will perform according to market trends. Therefore, it is important to diversify the portfolio to mitigate the risk. 

With Bajaj Markets you can invest in hybrid aggressive funds or any other scheme and diversify your portfolio easily. You can choose the best-performing schemes to invest in as per your financial goals and maximise growth.