Don't go by history alone while picking hybrid fund, say analysts

These are for long-term wealth; dynamic funds protect downside risk better

Aggressive hybrid funds (AHFs) are currently outperforming dynamic asset allocation or balanced advantage funds (DAA/BAFs) across investment horizons (see table). This has sparked a debate on whether it is better to invest in a category where the asset allocation remains static, or one where it keeps changing.

Higher equity allocation drove performance

The equity markets have done well over the past year (the Sensex is up 54 per cent). Explaining the outperformance, Kaustubh Belapurkar, director-manager research, Morningstar Investment Adviser India, says: “AHFs would have maintained their equity allocation of 65-80 per cent over the past year. DAA/BAFs, on the other hand, would