Aggressive hybrid MFs register sharp uptick in assets to ₹2.5 trn in Oct

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Aggressive hybrid mutual funds have been increasingly favoured among investors, with the asset base of the category surging to Rs 2.5 lakh crore in October 2025, an increase of 13 per cent from a year earlier.

This expansion comes at a time when the benchmark Nifty has gone through a year-long correction and periods of heightened volatility, pushing many investors to seek stability through blended portfolios.

Also, the investor base expanded significantly, with the number of folios increasing by 4 lakh over the past year to 60.44 lakh by October 2025 from 56.41 lakh in October 2024, the latest data with the Association of Mutual Funds in India (AMFI) showed.

This trend highlights the growing appeal of a balanced investment approach that combines growth and stability.

In line with this growing interest, aggressive hybrid funds, an investment solution blending equity and debt exposures, delivered robust returns over different timeframes.

On average, the category has generated returns of nearly 7 per cent over the past year, 16.5 per cent over two years, and more than 17 per cent over five years, industry data showed.

According to Shantanu Awasthi, Co-Founder & CEO of Mavenark Wealth, "These funds benefit from both sides -- equity and debt. Balanced funds tend to emerge as a strong category: in years where equity returns are volatile, the debt portion helps protect returns; and when equity is moving upwards, they capture the upside. They are most favourable for investors with medium or lower risk appetite."  As per Sebi rules, aggressive hybrid funds must invest 65-80 per cent of their corpus in equities. However, in practice, the category today averages around 72 per cent in equity and 21 per cent in debt. While this asset mix appears suitable for long-term investors, it also means they give up control over the exact equity-debt allocation. The same applies to market-cap distribution, Feroze Azeez, Joint CEO, Anand Rathi Wealth, said.

He added that nearly 75 per cent of the equity portion in most aggressive hybrid funds sits in large caps, which may not suit investors looking for a more diversified spread across segments.

According to the AMFI data, the asset base of aggressive hybrid funds rose from Rs 2.21 lakh crore in October 2024 to Rs 2.5 lakh crore in October 2025, marking a 13 per cent growth year-on-year.

Over the two- and five-year periods, aggressive hybrid funds have significantly outperformed the benchmark Nifty 50 Hybrid Composite Debt 65:35 Index.

ICICI Prudential Equity & Debt Fund leads the pack with a strong 2-year CAGR of 19.6 per cent and an impressive 5-year CAGR of 24.7 per cent, followed by Mahindra Manulife Aggressive Hybrid Fund, which has delivered 19.3 per cent and 20.4 per cent, respectively.

Other schemes such as Bandhan, Edelweiss, and Invesco India Aggressive Hybrid Funds have also posted double-digit returns, ranging between 18-19 per cent over 2 years and 16.5-19.9 per cent over 5 years. In comparison, the benchmark has generated a much lower 13.1 per cent.

Market experts believe that investing in a well-managed aggressive hybrid fund, particularly schemes such as ICICI Prudential Equity & Debt Fund and Mahindra Manulife Aggressive Hybrid Fund, can offer meaningful upside and put investors ahead on the path to long-term wealth creation. Both schemes have demonstrated strong performance across the two- and five-year horizons.

Additionally, these schemes offer a monthly dividend payout option, which provides an added advantage for investors seeking regular income, especially those who stand to benefit from recent tax cuts, they added.