Hybrid Scheme - Aggressive Hybrid Fund
Here are some key points about Hybrid Scheme – Aggressive Hybrid Fund:
Asset Allocation: Aggressive hybrid funds typically have a higher allocation to equities, ranging from 65% to 80% of the total portfolio, while the remaining allocation is invested in debt instruments. The equity portion provides the potential for capital appreciation, while the debt portion helps generate stable income and reduces portfolio volatility.
Growth and Income: Aggressive hybrid funds seek to provide investors with both capital appreciation and regular income. The equity component offers the potential for long-term growth, while the debt component generates income through interest payments. The combination aims to strike a balance between growth and income in the portfolio.
Risk Management: By including a significant allocation to debt instruments, aggressive hybrid funds aim to manage risk and provide stability to the portfolio. The debt portion helps cushion the impact of market volatility on the overall fund performance. However, it’s important to note that these funds still carry a certain level of risk due to the equity exposure.
Active Portfolio Management: Aggressive hybrid funds require active portfolio management. The fund manager makes tactical asset allocation decisions based on market conditions and their outlook for equity and debt markets. The fund manager may adjust the allocation between equities and debt instruments to capitalize on market opportunities or manage risk.
Diversification: Aggressive hybrid funds typically maintain a diversified portfolio of equity and debt instruments. The equity portion may include stocks from different sectors and market capitalizations to spread the investment risk. The debt portion includes fixed-income securities such as government bonds, corporate bonds, and money market instruments.
Benchmark: Aggressive hybrid funds may use a composite benchmark that combines equity and debt indices, such as a blend of equity benchmark (e.g., Nifty 50) and debt benchmark (e.g., CRISIL Composite Bond Fund Index). The benchmark serves as a reference point to evaluate the fund’s performance relative to a blended market index.
Investment Horizon: Aggressive hybrid funds are suitable for investors with a medium to long-term investment horizon. These funds provide a balanced approach to growth and income and are often recommended for investors seeking a moderate level of risk with potential for higher returns compared to pure debt funds.