Apt for primarily all investor classes who can take a certain degree of risk such as first time equity investors, those near their sunset years and still lagging on their retirement corpus can lap up Aggressive hybrid funds. As per the SEBI mandate, the fund category is asked to deploy between 65-80 percent of the AUM in equity while the rest has to be allocated towards debt of between 20-35 percent.
How does the Aggressive mutual fund category generate return for its investors?
With both the asset classes under its portfolio, while the equity class of asset generates returns when the market is performing good, the debt component lends safety and stability to your investment in volatile times or when the equity markets have been underperforming.
So, here if you are too thinking to start your equity investment journey with Aggressive Hybrid funds given the fact that they are not too high on risk and the debt portion offers some cushion, you can consider these Aggressive mutual funds based on 5-year returns:
Quant Absolute Fund:
Value Research 5-star rated fund is majorly concentrated around large caps within the equity to the tune of 45 percent, while the debt allocation is 18 percent in GoI securities. Top stock holdings of the fund include stocks like L&T, SBI, ITC, Vedanta, RIL and HDFC Bank among others.
The fund dates back to 2013 and is benchmarked against CRISIL Hybrid 35+65 Aggressive Index. The assets under management of the fund are Rs. 106 crore and it carries an high expense ratio of over 2 percent.
The fund's 1-year return is at 50.96 percent, while within the category the fund has outranked all others with the highest 5-year return of 20.11%. One can start SIP in the fund with a minimum amount of Rs. 1000. A SIP of Rs. 10000 per month started 5 year ago has grown in value to Rs.11.64 lakh, nearly doubling investors' money.
BOI AXA Mid & Small Cap Equity & Debt Fund - Growth
This aggressive hybrid fund is rated by both CRISIL and Value Research as 5 star and 4 star rated, respectively. The fund is tilted more towards the small cap equity with allocation of nearly 36 percent into the category. Within the debt space, the fund is invested into G-Sec and other low risk securities.
Started in the year 2016, the fund's performance is benchmarked against the NIFTY Mid Small Cap 400 TRI (70), CRISIL Short-Term Bond Index (30). The assets under the fund are on a higher side at Rs. 346 crore.
SIP in the fund can be started for Rs. 1000. The 1-year return of the fund has been 50.95 percent, while 5-year returns are also impressive at 18.02 percent.
Mirae Asset Hybrid Equity-Direct Plan-Growth:
5 star Value Research rated and 3-Star Crisil ranked aggressive hybrid fund commands a sizeable AUM of Rs. 6246 crore. The fund is majorly invested into large cap stocks.Top stock in the fund's portfolio include ICICI Bank, HDFC Bank, Infosys, Axis Bank, TCS and SBI among others.
The fund even excels on the expenses front with just 0.38 percent expense ratio.
Launched in the year 2015, the fund's performance is tracked against CRISIL Hybrid 35+65 Aggressive Index.
SIP in the fund can be initiated for Rs. 1000 while for lump sum investment one needs to park at least Rs. 5000.
Top and Best Aggressive Hybrid funds based on 5-year returns
|Aggressive hybrid fund||Annualized 5-year return in %||Value of Rs. 10,000 monthly SIP started 5 years ago (Investment amount of Rs. 6 lakh grown in value as specified below)|
|Quant Absolute Fund||21.11%||Rs. 11.64 lakh|
|BOI AXA Mid & Small Cap Equity & Debt Fund - Growth||18.02%||Rs. 10.3 lakh|
|Mirae Asset Hybrid - Equity - Direct Plan - Growth||17.16%||Rs. 9.3 lakh|
Taxation of aggressive hybrid mutual funds:
Since these aggressive hybrid mutual funds are equity oriented schemes their taxation is similar to equity mutual funds. So, if the fund units are redeemed after a period of 1-year then capital gains to the tune of Rs. 1 lakh in a financial year attract no taxation liability, else 10% capital gains tax is levied.
But in a case when units are redeemed before 1 year the gains are taxed at 15 percent.
In the case the fund gives out dividends then it is added to the taxpayers income and taxed as per their applicable tax slabs. Nevertheless, if the dividend income exceeds Rs. 5000 in a fiscal year then before the distribution of the dividend fund house deducts TDS @ 10%
Investing in equity mutual funds is risky and investors are advised caution. Invest only if you have an appetite to take risk. Please be informed neither Greynium Information Technologies Pvt Ltd nor the author are liable for any losses caused as a result of decisions based on the article.