After the reclassification of mutual funds, several new categories have been created. One of them is the aggressive hybrid scheme category. Prior to classification, these schemes were known as hybrid schemes or balanced schemes. However, market regulator SEBI has defined them clearly by creating seven hybrid schemes. These include Aggressive Hybrids, Conservative Hybrids, Balanced Hybrids, Dynamic Asset Allocation or Balanced Advantage, Multi-Asset Allocation, Arbitrage and Equity Saving Schemes. Aggressive hybrid schemes require 65-80% of their total amount to be invested in equity. The remaining 20-35% have to invest in debt. They invest like pre-balanced or equity hybrid schemes. Due to a limit of at least 65% investment in equity, they are taxed like equity schemes.
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Aggressive hybrid funds are a category of mutual funds. This category formed after the re-classification of mutual funds. According to Sebi rules, it is necessary to invest 65-80% of your total amount in equity for aggressive hybrid schemes. The remaining 20-35% have to invest in debt. They invest like pre-balanced or equity hybrid schemes. Due to a limit of at least 65% investment in equity, they are taxed like equity schemes.
This means that if the investment in aggressive hybrid funds lasts for more than a year, then the long term capital gains of more than Rs 1 lakh are taxed at 10%. You should not be confused with the word ‘aggressive’ in these schemes. Many mutual fund advisors recommend new investors to invest in aggressive hybrid schemes. He argues that a mixed portfolio of equity and debt gives them stability during the turmoil.
Investing in debt helps aggressive hybrid schemes to cope with ups and downs. Equity schemes investing the entire amount in shares will always depend on market performance.
Why stability is important for new investors?
Most of the new investors get nervous when the value of their investment declines during the market decline. The thought of stopping investment starts in his mind. The stability of aggressive hybrid schemes gives some relief to these investors as compared to others.
If you are a Conservative investor investing in shares. Also do not want to face much instability. So, keeping in mind the long term, you can invest in aggressive hybrid schemes.
Some aggressive hybrid schemes have been suggested here. Money can be invested in them keeping long term in mind.
These are the best aggressive hybrid mutual funds for investment.
- SBI Equity Hybrid Fund
- ICICI Prudential Equity and Debt Fund
- Mirae Asset Hybrid
- Aditya Birla Sun Life Equity Hybrid 95 Fund
- DSP BlackRock Equity and Bond Fund
Note: The mutual fund scheme is a risk investment plan. please consult the related person before starting any scheme and knows all T&C and risk about the plan. first, gain all information about the mutual fund before starting it.