- Date : 31/01/2023
- Read: 4 mins
Want to know how aggressive hybrid funds benefit investors? Read this full article to know more.
Aggressive hybrid funds are a popular investment option among young investors and those with a long-term investment horizon. These funds offer a unique blend of debt and equity, providing investors with exposure to the stock market while also minimizing risk. Additionally, aggressive hybrid funds feature automatic rebalancing, making them a convenient choice for those who want to maintain a balanced portfolio without constantly monitoring and adjusting their investments. With low volatility and equity-like taxation, aggressive hybrid funds are a great way for investors to get started on the path to financial success. This article does a detailed analysis of all aspects of aggressive hybrid funds. Prominent topics covered in the article include the following:
- How can we define aggressive hybrid funds?
- How do aggressive hybrid funds work?
- Who should consider investing in Aggressive Hybrid Funds?
- Taxing of aggressive hybrid funds?
- List of 5 best-performing aggressive hybrid funds
Also Read: To read more about professionally managed funds
How can we define aggressive hybrid funds?
Aggressive hybrid funds are a kind of mutual fund that has a greater allocation in equities and/or equity-related instruments. These funds invest in both debt and equity asset classes and are required by regulatory guidelines to place between 65% and 80% of their assets in equity and the rest in debt and money market instruments. These funds are ideal for investors with a time frame of more than three years, who are seeking exposure to equity assets, low volatility, taxation similar to equity and automatic rebalancing.
Working of aggressive hybrid funds
According to most financial planners, asset allocation is crucial for achieving long-term financial goals. As the ratio of equity and debt in a portfolio fluctuates based on market conditions and interest rates, it is necessary for investors to regularly monitor and adjust their portfolios. Many investors find this task challenging. One solution is to invest in aggressive hybrid funds, which automatically maintain a balance of 65-70% in equities and the rest in debt. Fund management is taken care of by professional Fund Managers. Additionally, aggressive hybrid funds typically invest a large proportion of their equity allocation in large-cap stocks and high-quality debt instruments.
Also Read: To know more about market insights
Who should consider investing in aggressive hybrid funds?
Hybrid funds are a suitable option for investors looking to start investing in equities while minimizing risk. The debt component of these funds provides a buffer against market corrections and helps to stabilize the value of the investment. These funds are best suited for investors with a moderate to long-term investment horizon. These funds have the potential to provide above-average returns.
Taxing of Aggressive Hybrid Funds
One of the benefits of investing in aggressive hybrid funds is their tax treatment. As these funds have a higher allocation to equity than other hybrid funds, they are taxed as equity funds. Investors in this fund who hold it for less than 12 months will be subject to a 15% tax on short-term capital gains, while those who hold it for more than 12 months will not be taxed on long-term capital gains up to INR 1 lakh per financial year, and will be subject to a 10% tax on any gains over that amount.
List of 5 Best Performing Aggressive Hybrid Funds based on past 3-year and 5-year returns:
Source: Data were taken from https://cleartax.in/s/aggressive-hybrid-funds
Also Read: To know more about various investment options
Aggressive hybrid funds are a suitable investment option for young investors and those with a long-term investment horizon. These funds offer a unique blend of debt and equity, providing investors with exposure to the stock market while also minimizing volatility. Additionally, aggressive hybrid funds feature automatic rebalancing, making them a convenient choice for those who want to maintain a balanced portfolio without constantly monitoring and adjusting their investments.
Source: ET Money
Aggressive hybrid funds are a popular investment option among young investors and those with a long-term investment horizon. These funds offer a unique blend of debt and equity, providing investors with exposure to the stock market while also minimizing risk. Additionally, aggressive hybrid funds feature automatic rebalancing, making them a convenient choice for those who want to maintain a balanced portfolio without constantly monitoring and adjusting their investments. With low volatility and equity-like taxation, aggressive hybrid funds are a great way for investors to get started on the path to financial success. This article does a detailed analysis of all aspects of aggressive hybrid funds. Prominent topics covered in the article include the following:
- How can we define aggressive hybrid funds?
- How do aggressive hybrid funds work?
- Who should consider investing in Aggressive Hybrid Funds?
- Taxing of aggressive hybrid funds?
- List of 5 best-performing aggressive hybrid funds
Also Read: To read more about professionally managed funds
How can we define aggressive hybrid funds?
Aggressive hybrid funds are a kind of mutual fund that has a greater allocation in equities and/or equity-related instruments. These funds invest in both debt and equity asset classes and are required by regulatory guidelines to place between 65% and 80% of their assets in equity and the rest in debt and money market instruments. These funds are ideal for investors with a time frame of more than three years, who are seeking exposure to equity assets, low volatility, taxation similar to equity and automatic rebalancing.
Working of aggressive hybrid funds
According to most financial planners, asset allocation is crucial for achieving long-term financial goals. As the ratio of equity and debt in a portfolio fluctuates based on market conditions and interest rates, it is necessary for investors to regularly monitor and adjust their portfolios. Many investors find this task challenging. One solution is to invest in aggressive hybrid funds, which automatically maintain a balance of 65-70% in equities and the rest in debt. Fund management is taken care of by professional Fund Managers. Additionally, aggressive hybrid funds typically invest a large proportion of their equity allocation in large-cap stocks and high-quality debt instruments.
Also Read: To know more about market insights
Who should consider investing in aggressive hybrid funds?
Hybrid funds are a suitable option for investors looking to start investing in equities while minimizing risk. The debt component of these funds provides a buffer against market corrections and helps to stabilize the value of the investment. These funds are best suited for investors with a moderate to long-term investment horizon. These funds have the potential to provide above-average returns.
Taxing of Aggressive Hybrid Funds
One of the benefits of investing in aggressive hybrid funds is their tax treatment. As these funds have a higher allocation to equity than other hybrid funds, they are taxed as equity funds. Investors in this fund who hold it for less than 12 months will be subject to a 15% tax on short-term capital gains, while those who hold it for more than 12 months will not be taxed on long-term capital gains up to INR 1 lakh per financial year, and will be subject to a 10% tax on any gains over that amount.
List of 5 Best Performing Aggressive Hybrid Funds based on past 3-year and 5-year returns:
Source: Data were taken from https://cleartax.in/s/aggressive-hybrid-funds
Also Read: To know more about various investment options
Aggressive hybrid funds are a suitable investment option for young investors and those with a long-term investment horizon. These funds offer a unique blend of debt and equity, providing investors with exposure to the stock market while also minimizing volatility. Additionally, aggressive hybrid funds feature automatic rebalancing, making them a convenient choice for those who want to maintain a balanced portfolio without constantly monitoring and adjusting their investments.
Source: ET Money
