Aggressive hybrid funds deliver up to 18% returns over 5 years; here are the top performers

Over the long term, the scheme has created substantial wealth for investors

• ICICI Prudential Equity & Debt Fund leads aggressive hybrid funds
• Fund delivered 18 percent annualised returns over five years
• Suitable for investors seeking balanced long-term wealth creation

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Aggressive hybrid mutual funds have delivered solid performance in recent years, benefiting from their balanced allocation between equities and debt.

While the equity component helps capture market upside, the debt portion offers some stability during volatility. Over the past year, several schemes category have generated double-digit returns. The five-year performance is even stronger, with some funds delivering annualised returns of around 15–18 percent.

Over a one-year period, funds such as HSBC Aggressive Hybrid Fund and Bank of India Mid & Small Cap Equity & Debt Fund delivering around 16 percent and 14 percent returns respectively over one year.

ICICI Prudential Equity & Debt Fund has given a return of around 18 percent annualised returns over the five-year period, placing it at the top of the category. Close behind is Bank of India Mid & Small Cap Equity & Debt Fund, which has returned roughly 18 percent  and Quant Aggressive Hybrid Fund 16 percent. Other schemes include Edelweiss Aggressive Hybrid Fund and JM Aggressive Hybrid Fund, both of which have generated close to 15 percent returns over a five-year period.

What are aggressive hybrid funds?

Aggressive hybrid mutual funds are schemes that invest in a mix of equities and debt, with a higher allocation to equities to drive growth. Typically, these funds invest about 65-80 percent in stocks and the remaining 20-35 percent in instruments such as bonds and money market securities.

Sankaran Naren, ED & CIO, said, “Hybrid funds play an important role in helping investors navigate uncertain and evolving market conditions by combining the growth potential of equities with the stability of fixed income."

A lump sum investment of Rs 1 lakh in ICICI Prudential Equity & Debt Fund at inception of (November 3, 1999) would have grown to around Rs 40.70 lakh as of February 28, 2026, translating into a compound annual growth rate of 15.11 percent. As of February 28, the scheme had a net equity exposure of approximately 76 percent, with the remaining funds invested in fixed income instruments. In equities, the portfolio mainly allocates to large-cap companies, with selective exposure to mid-cap and small-cap stocks to support long-term growth.

Taxation of Aggressive hybrid funds

Aggressive hybrid funds are taxed as equity funds as they maintain over 65 percent allocation to equities. Short-term capital gains, if held for less than a year, are taxed at 15 percent. Long-term capital gains above Rs 1.25 lakh are taxed at 12.5 percent after a holding period of one year.

Who can consider Aggressive hybrid funds 

Aggressive hybrid funds are generally suitable for investors with a moderate risk appetite and an investment horizon of at least three-five years.  It is suitable for investors seeking long-term wealth creation with relatively lower volatility than equity funds. It can also be considered by investors seeking balanced exposure to equities and fixed income in a single investment solution, particularly those with an investment horizon of three years or more.

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