Worried about market turbulence? Here are top-performing aggressive hybrid funds to ride out the volatility
Top Hybrid Mutual Funds: Aggressive hybrid funds invest between 65 and 80 per cent in equity and the rest in debt. Higher allocation to equity can boost returns during stock market rallies, while the debt component can cap losses during market turbulence.
Indian equity markets have been on a downtrend over the last one month. As of November 4, the BSE Sensex has plummeted more than eight per cent from its last peak of September 26, 2024 (85,836), while BSE Mid-cap and BSE Small-cap indices have declined by 7.4 per cent and 4.2 per cent, respectively. Factors that have triggered this volatility and dampened investors’ sentiment include tepid second-quarter (Q2) earnings, relentless foreign institutional investors’ (FIIs) sell-offs, rising valuations of domestic mid-and small-cap stocks and escalating geopolitical tensions. However, investors should focus on their long-term investment goals and not be influenced by short-term market turbulence, according to financial advisors.
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Aggressive hybrid mutual funds are an option for investors with a medium-risk appetite who are worried about the current volatility in the markets. Peeyush Pandey, a registered investment advisor, said, “Within the hybrid fund sub-categories, aggressive hybrid funds are investing between 65 and 80 per cent in equity and the rest are being parked in debt assets. The higher allocation to equity can help deliver good returns during equity market rallies, while the debt exposure helps cap losses amid market downturns.” These funds will be treated like equity funds for taxation purposes, he said.
“In today’s market environment, investors might consider actively managed aggressive hybrid funds that have experienced various market cycles. Typically, these funds maintain a well-rounded equity component, with exposure to large, mid, and small caps, while the debt portion generates yields through a mix of credit, interest rate, and duration strategies,” said Ravi Kumar TV, Director, Gaining Ground Investment Services. The funds navigate complex economic cycles, adjusting their composition of equities and bonds to match opportunities as and when they arise, Kumar added.
Here’s a lowdown on the top-performing aggressive hybrid funds, whose selection choice is based on their 10-year SIP (systematic investment plan) returns. Source: ACEMF
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Quant Absolute Fund 10-year SIP return (XIRR): 18.9% Fund Manager: Ankit A Pande, Vasav Sahgal and Sanjeev Sharma
