Asset allocation requires investors to diversify their investment portfolios into equity, debt, gold, etc. But managing investments in different financial products can be a hassle. An aggressive hybrid fund provides you with a combination of equity and debt in a single mutual fund scheme.
Historically, equities have given inflation-beating high returns and created wealth for investors. However, equities are also prone to sharp downfalls from time to time. During such times, if you have some portfolio allocation to debt, it acts like a shock absorber and cushions the impact of the equity market fall. Aggressive hybrid funds can provide investors with this combination of equity (for growth) and debt (for stability).
In this article, we will learn about aggressive hybrid funds, their investment strategy, the returns they offer, and whether you should invest in them.
What is an aggressive hybrid fund?
An aggressive hybrid fund is an open-ended hybrid mutual fund scheme that predominantly invests in equity and equity-related instruments. They have two parts: