Best Aggressive Hybrid Funds in India 2025: Returns, Risks, Key Factors & Taxation
If you are exploring high-growth investment options, aggressive mutual funds might catch your attention. These funds aim to deliver higher returns by investing predominantly in equity or equity-related securities. However, they also come with heightened risk due to their exposure to market volatility. Understanding their features, types, and risks can help you evaluate whether these funds align with your financial strategy.
Top 10 Aggressive Hybrid Funds to Invest in 2025
Here is an educational list of the top 10 aggressive hybrid funds in the Indian stock market for 2025:
| Name | AUM (in Cr.) | Expense Ratio (%) | CAGR 3Y (%) | Absolute Returns - 1Y (%) |
|---|---|---|---|---|
| Invesco India Aggressive Hybrid Fund | 574.00 | 0.82 | 16.17 | 20.71 |
| Kotak Equity Hybrid Fund | 6,913.47 | 0 | 15.02 | 16.95 |
| DSP Aggressive Hybrid Fund | 10,306.16 | 1 | 13.96 | 16.29 |
| Mahindra Manulife Aggressive Hybrid Fund | 1,522.49 | 0.50 | 16.13 | 16.00 |
| UTI Aggressive Hybrid Fund | 6,069.51 | 1.23 | 16.00 | 15.83 |
| Edelweiss Aggressive Hybrid Fund | 2,351.38 | 0.35 | 17.53 | 15.61 |
| Baroda BNP Paribas Aggressive Hybrid Fund | 1,184.08 | 0.58 | 14.81 | 14.86 |
| PGIM India Hybrid Equity Fund | 211.26 | 0.78 | 11.33 | 14.50 |
| Axis Aggressive Hybrid Fund | 1,576.01 | 1.08 | 8.98 | 14.08 |
| ICICI Pru Equity & Debt Fund | 40,089.04 | 1.01 | 17.77 | 13.52 |
Note: The list of top rated aggressive growth mutual funds is from 3rd February 2025. The data present in the list of the best aggressive hybrid funds is taken from Tickertape Mutual Fund Screener.
What are Aggressive Funds?
Aggressive funds are mutual funds that focus on maximising capital appreciation. These funds often invest heavily in equities, high-growth stocks, or emerging markets. Aggressive hybrid fund blend both equity and debt securities, with a higher emphasis on equity, as regulated by SEBI guidelines. Typically, they invest 65% to 80% in equity and related instruments, with the remainder in debt. Investors can access them through SIP or lump sum investments.
They aim to outperform other investment categories over the long term, making them suitable for investors with a high-risk appetite. These funds offer potentially greater returns compared to pure debt funds due to their equity exposure. However, they also come with increased risk, making them moderately high-risk investments. Fund managers wield significant influence, crafting investment strategies and seeking arbitrage opportunities for returns. Their stock selection spans from value to growth.
When you invest in aggressive investment funds, the potential for substantial growth comes with the trade-off of increased market volatility. They are typically long-term investments designed for wealth accumulation.
Overview of the Aggressive Hybrid Funds in India 2025
Invesco India Aggressive Hybrid Fund
Launched on 30th July 2018, Invesco India Aggressive Hybrid Fund is a hybrid mutual fund that invests primarily in equity (65-80%) and the remainder in debt instruments. The fund aims to provide long-term capital appreciation while maintaining stability through debt allocation.
As of 3rd February 2025, the fund has an asset under management (AUM) of Rs. 574.00 cr. with an expense ratio of 0.82%. The fund has delivered a compounded annual growth rate (CAGR) of 16.17% over the past three years, while its absolute returns for one year stand at 20.71%.
Kotak Equity Hybrid Fund
Introduced on 2nd November 1999, Kotak Equity Hybrid Fund is designed to balance growth and stability by investing predominantly in equities while maintaining a portion in debt instruments. This hybrid approach aims to mitigate risks while capturing equity market gains.
As of 3rd February 2025, the fund holds an AUM of Rs. 6,913.47 cr. with an expense ratio of 0%. The three-year CAGR is 15.02%, and the absolute one-year return is 16.95%.
DSP Aggressive Hybrid Fund
Launched on 27th May 1999, DSP Aggressive Hybrid Fund follows an investment strategy that allocates most of its portfolio to equities while holding a smaller percentage in debt instruments to balance risk and returns.
As of 3rd February 2025, the fund manages an AUM of Rs. 10,306.16 cr., with an expense ratio of 1%. The fund has recorded a three-year CAGR of 13.96% and an absolute return of 16.29% over the past year.
Mahindra Manulife Aggressive Hybrid Fund
Introduced on 30th July 2018, Mahindra Manulife Aggressive Hybrid Fund invests predominantly in equity and equity-related instruments, with a portion allocated to debt instruments for risk management and stability.
As of 3rd February 2025, the fund has an AUM of Rs. 1,522.49 cr. and an expense ratio of 0.50%. The three-year CAGR is 16.13%, while the one-year absolute return stands at 16.00%.
UTI Aggressive Hybrid Fund
Launched on 10th August 2006, UTI Aggressive Hybrid Fund follows a diversified investment strategy, allocating a major portion to equities while including debt instruments to reduce volatility.
As of 3rd February 2025, the fund has an AUM of Rs. 6,069.51 cr. and an expense ratio of 1.23%. The fund has recorded a three-year CAGR of 16.00% and an absolute return of 15.83% over the last year.
Edelweiss Aggressive Hybrid Fund
Introduced on 30th August 2016, Edelweiss Aggressive Hybrid Fund focuses on capital appreciation through a mix of equity and debt investments, aiming to provide an optimal risk-return balance.
As of 3rd February 2025, the fund manages an AUM of Rs. 2,351.38 cr., with an expense ratio of 0.35%. The fund has delivered a three-year CAGR of 17.53% and a one-year absolute return of 15.61%.
Baroda BNP Paribas Aggressive Hybrid Fund
Launched on 28th February 2019, Baroda BNP Paribas Aggressive Hybrid Fund follows a strategy of investing primarily in equity while maintaining a debt component to balance risk and provide stability.
As of 3rd February 2025, the fund has an AUM of Rs. 1,184.08 cr. and an expense ratio of 0.58%. The fund’s three-year CAGR stands at 14.81%, with an absolute one-year return of 14.86%.
PGIM India Hybrid Equity Fund
Introduced on 29th January 2004, PGIM India Hybrid Equity Fund aims to generate capital appreciation through equity investments while ensuring stability through debt allocation.
As of 3rd February 2025, the fund holds an AUM of Rs. 211.26 cr., with an expense ratio of 0.78%. The fund has achieved a three-year CAGR of 11.33% and an absolute return of 14.50% over the past year.
Axis Aggressive Hybrid Fund
Launched on 10th August 2018, Axis Aggressive Hybrid Fund follows a growth-oriented approach by investing predominantly in equities while allocating a portion to debt instruments for stability.
As of 3rd February 2025, the fund has an AUM of Rs. 1,576.01 cr. and an expense ratio of 1.08%. The three-year CAGR stands at 8.98%, while the absolute return for one year is 14.08%.
ICICI Pru Equity & Debt Fund
Introduced on 3rd November 1999, ICICI Pru Equity & Debt Fund is one of the largest hybrid funds in India, balancing its portfolio with equity and debt investments to optimise risk-adjusted returns.
As of 3rd February 2025, the fund holds an AUM of Rs. 40,089.04 cr., with an expense ratio of 1.01%. The fund has recorded a three-year CAGR of 17.77% and an absolute one-year return of 13.52%.
Features of Aggressive Funds
Here are some defining features of aggressive mutual funds:
- High Equity Exposure: These funds prioritise equities and equity-linked instruments, which may offer higher returns.
- Growth-Oriented Portfolio: The portfolio primarily targets sectors and stocks with strong growth potential.
- Market Volatility: Due to their equity focus, these funds are sensitive to market movements and may show significant fluctuations.
- Long-Term Focus: Designed for investors who can remain invested for a longer period to benefit from market recoveries and growth.
- Active Fund Management: Skilled fund managers actively oversee the portfolio to maximise returns and mitigate risks.
Types of Aggressive Mutual Funds
There are various categories of aggressive investment funds, each with distinct strategies:
- Aggressive Growth Mutual Funds: These funds invest in both stocks and debt products, typically with a 65-80% equity allocation. They suit individuals in the accumulation phase seeking automatic asset allocation and rebalancing solutions.
- Small-Cap and Mid-Cap Funds: These funds invest in smaller companies that may offer high growth potential but carry greater risks.
- Sector-Specific Funds: These funds focus on industries such as technology, healthcare, or energy to capitalise on sectoral growth trends.
- Multi-Cap Funds: These funds diversify across small-cap, mid-cap, and large-cap stocks, offering a balance between growth and risk.
- Aggressive Hybrid funds: These funds invest in both stocks and debt products, typically with a 65-80% equity allocation. They suit individuals seeking automatic asset allocation and rebalancing solutions in the accumulation phase.
How Do Aggressive Funds Work?
Aggressive growth funds maintain stability by blending equity and debt investments, adhering to SEBI standards with at least 20% allocated to debt and FD-like instruments. Equities offer long-term growth potential, while debt instruments ensure income stability. These funds aim to harness both benefits in one investment. Achieving favourable outcomes demands patience and a long-term perspective, as equity flourishes in market upswings while debt investments offer resilience during downturns.
Fund managers actively manage the portfolio, adjusting the allocation based on market conditions and investment objectives. This balanced approach aims to optimise returns while managing risk, making aggressive funds suitable for investors seeking a blend of growth and stability in their investment portfolio.
Why Should You Invest in the Best Aggressive Growth Mutual Funds?
Investing in aggressive mutual funds might be a good option if you are looking for:
- Potential for High Returns: These funds aim to outperform traditional mutual funds over the long term.
- Portfolio Diversification: By investing in multiple sectors and market segments, they may help reduce reliance on a single asset class.
- Professional Management: Fund managers actively monitor and adjust the aggressive mutual fund portfolio to optimise performance based on market trends.
How to Choose the Best Aggressive Hybrid Funds?
Choosing the best aggressive hybrid funds involves several key steps:
- Research Fund Performance: Evaluate the historical performance of different aggressive hybrid funds to identify consistent performers over various market cycles.
- Assess Fund Manager Expertise: Look into the track record and experience of the fund manager managing the aggressive hybrid fund. A skilled and experienced manager can make a significant difference in fund performance.
- Analyse Portfolio Composition: Examine the asset allocation and underlying holdings of each aggressive hybrid fund. Assess the balance between equity and debt components to ensure alignment with your risk tolerance and investment goals.
- Consider Expense Ratio: Compare the expense ratios of different aggressive hybrid funds to understand the cost of investing. Lower expense ratios can potentially translate into higher returns for investors over the long term.
- Review Risk Factors: Evaluate the risk factors associated with each aggressive hybrid fund, including volatility, credit risk, and interest rate risk. Understanding these factors can help you make informed investment decisions.
By following these steps, investors can effectively choose the best aggressive hybrid funds that align with their investment objectives and risk preferences.
How to Invest in Aggressive Hybrid Funds?
Investing in Aggressive Hybrid Funds involves several steps:
- Research and Identify Funds: Begin by researching different Aggressive Hybrid Funds available in the market. Look for funds with a track record of consistent performance and a strong investment strategy.
- Assess Risk and Returns: Evaluate the risk-return profile of each fund to ensure it aligns with your investment goals and risk tolerance. Aggressive Hybrid Funds typically invest in a mix of equity and debt instruments, offering the potential for higher returns with moderate risk.
- Review Fund Manager’s Expertise: Assess the expertise and experience of the fund manager managing the Aggressive Hybrid Fund. A skilled and knowledgeable fund manager can play a crucial role in achieving the fund’s investment objectives.
- Analyse Portfolio Holdings: Dive deep into the fund’s portfolio holdings to understand its asset allocation, sector diversification, and individual stock selection. Ensure the fund’s investment approach matches your investment philosophy.
- Consider Costs and Fees: Compare the expense ratios and other fees associated with different Aggressive Funds. Lower expenses can contribute to higher net returns over the long term.
- Monitor Performance: Regularly monitor the performance of the Aggressive Hybrid Fund to ensure it continues to meet your investment objectives. Keep track of market conditions and any changes in the fund’s investment strategy.
- Stay Informed: Stay updated with market trends, economic indicators, and regulatory changes that may impact Aggressive Hybrid Funds. Being informed allows you to make well-informed investment decisions.
By following these steps, investors can effectively invest in Aggressive Hybrid Funds and potentially achieve their financial goals.
Taxation of Aggressive Mutual Funds
Short-Term Capital Gains (STCG)
These are the gains from investments held for less than one year.
- Tax Rate: These gains are now taxed at 20%, an increase from the previous rate of 15%.
Long-Term Capital Gains (LTCG)
These are the gains from investments held for more than one year.
- Tax Rate: Long-term gains exceeding ₹1.25 lakh are taxed at 12.5%, up from the earlier rate of 10%. This change applies without indexation benefits.
Who Should Invest in Aggressive Mutual Funds?
Aggressive Hybrid Funds’ returns are largely influenced by the performance of equity instruments in the market. These funds are suitable for:
- Investors who are seeking moderately high-risk investments, as about 80% of the fund’s value is typically allocated to equities. This makes them vulnerable to market downturns.
- New investors eager to experience market dynamics can explore aggressive hybrid funds. These funds mitigate risk by investing a portion of the assets in debt instruments, providing a balanced exposure.
- Those aiming to generate income from market investments may find aggressive hybrid mutual funds appealing. They offer the potential for capital appreciation along with income.
- Investors aiming for long-term wealth creation, especially over a tenure of 3 years or more, may find aggressive hybrid funds suitable. These funds tend to perform better over longer periods, making them suitable for mid-range future goals, such as a 5-year investment horizon.
- Investors nearing retirement age can benefit from aggressive hybrid funds to swiftly accumulate a retirement corpus. Starting investments in these funds about 5 years before retirement can provide growth opportunities with manageable risk.
Factors to Consider While Investing in Aggressive Funds
Before choosing aggressive mutual funds, you may want to consider the following:
- Performance: Top aggressive mutual funds can yield high returns, catering to investors comfortable with moderate risk. With 80% of the investment in equity-linked schemes, these funds are volatile but potentially rewarding.
- Investor Profile: Ideal for those seeking capital appreciation or regular dividends, especially for long-term goals such as retirement planning.
- Expense Ratio: Analyze the fund’s expense ratio, opting for lower costs to maximise returns as per SEBI regulations.
- Asset Allocation: These funds allocate 65% to 80% to high-risk equity investments and the rest to debt securities, balancing return potential with risk management.
- Taxation: Tax implications vary based on the duration of investment, with long-term gains taxed at 10% and short-term gains at 15%.
- Investment Goals: Suited for long-term financial goals like retirement or education expenses, but not recommended for short-term objectives due to volatility.
- Investment Horizon: Consider the investor’s age and risk tolerance; younger investors with longer horizons may benefit more from these funds.
- Direct vs. Regular Plan: Choose between direct and regular plans based on whether you prefer to invest independently or through a third-party agent, considering the impact on returns and expenses.
- Risk Tolerance: Assess whether you are comfortable with the potential losses that come with higher equity exposure.
- Portfolio Diversification: Verify that the fund invests across multiple sectors or markets to balance risks.
Advantages of Investing in Aggressive Funds
Investing in good aggressive mutual funds may offer the following benefits:
- Potential for High Growth: These funds aim for better returns than traditional mutual funds.
- Active Fund Management: Professional fund managers actively oversee investments to capitalise on growth opportunities.
- Sectoral Focus: You may benefit from exposure to high-growth industries or emerging market trends.
Risks Involved While Investing in Aggressive Funds
You should also be mindful of the risks associated with most aggressive mutual funds:
- Market Volatility: Returns can fluctuate due to their reliance on equities.
- High Risk Exposure: There is a greater risk of capital loss, especially during market downturns.
- Sector-Specific Risks: Funds heavily invested in particular sectors may face concentrated losses during industry-specific downturns.
- Liquidity Issues: Some stocks in the portfolio may not be easily sold during adverse market conditions.
To Wrap Up..
Aggressive mutual funds are designed for investors seeking high returns and willing to accept higher risks. By understanding their features, types, and risks, you can decide if they align with your investment goals. Always consider factors like performance history, expense ratios, and portfolio diversification before making a choice.
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Frequently Asked Questions(FAQs) on Aggressive Hybrid Funds
If you are new to investing, you can explore good aggressive mutual funds that balance growth potential with moderate risk. Look for funds with a strong track record and diversified portfolios.
Top-rated aggressive growth mutual funds use active management to adjust their holdings during downturns. Diversifying across sectors may also help mitigate losses.
While aggressive growth mutual funds do not offer tax-saving benefits like ELSS funds, long-term gains are taxed at a favourable rate of 10%.
Aggressive growth mutual funds focus heavily on equities, aiming for higher returns, whereas balanced funds divide investments between equities and debt to reduce risk.
No, the most aggressive mutual funds focus on growth rather than income stability, making them unsuitable if you are looking for consistent income streams.
Aggressive hybrid funds offer exposure to both equity and debt, providing an automatic asset allocation solution for investors seeking simplicity in their portfolios. They suit DIY investors or those preferring independence from financial intermediaries like distributors or planners.
An investor should at least invest for three years to profit from these investments.
