Hybrid Funds

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.

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 return

Continue SIP if the fund has maintained its strategy and performance consistency, and continues to suit your goals

Such funds are not entirely immune to volatility due to their considerable equity allocation

Equity exposure of most schemes now above 50%

Cross no man's land with fund allocation hinging on liquidity and benchmarks

These funds typically invest 65-80 per cent of their assets in equities for long-term, inflation-beating returns, while the rest is invested in debt for stability.

The category's average allocation to large, mid, and smallcaps was 48.09 per cent, 12.63 per cent and 9.34 per cent, respectively

Hybrid mutual fund schemes attracted Rs 1.19 lakh crore in 2024-25, 18 per cent lower than the preceding fiscal, owing to market turbulence in the second half of FY25 triggered by corporate earnings slowdown and geo-political tensions. Despite the moderation in inflow, the category has seen a robust increase in both the number of investors and assets under management (AUM) during FY25 compared to those in the preceding fiscal, data with the Association of Mutual Funds in India (Amfi) showed. A key factor contributing to this resilience is the drawdown protection provided by the debt component of hybrid schemes. "The drawdown protection offered by the debt component of hybrid schemes is a key reason, as it allows investors to stay invested without the stress that comes with pure equity volatility. The NAVs (net asset valued) of hybrid funds typically experience lower drawdowns compared to equity funds, making them a preferred choice for investors seeking a more stable journey," Trive

The fund aims to provide capital growth and current income through a portfolio invested predominantly in equities, with the balance in debt and money market securities

Inflows, folio additions decline for three straight months

Through hybrid mutual funds, investors can not only benefit from the potential market growth but also reduce their risk by investing in debt securities

Hybrid funds provide a structured way to handle market fluctuations

If interest rates decline, the bond component of these portfolios could generate capital gains. Conversely, rising interest rates may cause short-term losses

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Equity savings schemes offer lower-risk hybrid options with tax advantages over most other mutual fund schemes with similar risk profiles

Asset allocation ensures investor gets small exposure to stocks in a predominantly bond portfolio

The fund aims to provide capital growth as well as regular income by predominantly investing in equities, with debt and money market securities making up a smaller pie

The change in debt fund taxation, combined with the desire for diversification and risk management, fuelled investor interest in these balanced investment products

The fund aims to provide capital growth and current income through a portfolio invested predominantly in equities, with a balance in debt and money market securities