Investors with a medium risk profile can consider investing in the aggressive hybrid funds. These schemes are good picks as they allow you to participate on the upside, while cushioning your downside as compared to pure equity funds
Aggressive hybrid funds rebalance their asset allocation based on market conditions. Apart from investing at least 65 percent of equity portion, fund managers allocate the remaining 35 percent into debt and other securities.
With the equity markets are trading at their peak, investors who have achieved their financial targets and also investors with medium risk profile can consider shifting their investments from high-risk investments such as mid- and small-cap funds to relatively less risky funds such as hybrid funds
While the equity portion in the aggressive hybrid funds helps to deliver better risk-adjusted return during equity market rallies, the debt portion helps to contain the losses in downturns. This eventually helps them to deliver balanced and better returns over the long term