Mutual funds: Investment in these 5 aggressive hybrid schemes doubled in the past 5 years; check list here

Prior to investing in a mutual fund, investors tend to examine the past returns and compare them against the similar schemes in the same category. The mutual fund schemes which tend to deliver high returns for several years in a row are believed to be more lucrative vis-à-vis the ones which fail to deliver high returns.

It is a different matter that experts, time and again, have pointed out that the historical returns do not guarantee the future returns of a mutual fund scheme.

This is because there are other key factors such as the category of fund, macroeconomic factors, reputation of fund house and also that of fund managers who are managing the schemes, and importantly – the risk appetite of investor(s) which collectively make a scheme worth of investment.

Here, we examine the past returns of a few aggressive hybrid mutual funds which have given annualised returns of more than 16 percent in the past half a decade. In other words, if an investor had decided to invest ₹1 lakh in one of those schemes five years ago, it would have grown to ₹2.10 lakh, i.e., more than doubled.

(Source: AMFI; 5-year-returns as on March 18, 2024)

As the table above shows, the highest returns of 23.90 percent were delivered by Quant Absolute Fund, whereas the lowest return of 16 percent (among the top-performing schemes) was given by Kotak Equity Hybrid Fund in the past five years.

In other words, if a retail investor had invested ₹1 lakh in Quant Absolute Fund five years ago, it would have grown to ₹2.91 lakh by now. And if someone had invested the same sum in Kotak Equity Hybrid Fund, it would have grown to ₹2.10 lakh.

As the name suggests, aggressive hybrid mutual funds are meant for investors with a high risk appetite since they have an equity allocation of anywhere between 65 to 80 percent, while the remainder of assets can be invested in debt.

In balanced hybrid mutual funds, allocation to equity hovers in the range of 40 to 60 percent, whereas in conservative hybrid funds, the allocation to equity is a meagre 10 to 25 percent of total assets.

Disclaimer: Investing in mutual funds carries risks and past performance is not indicative of future results. It is recommended to consult with a financial advisor before making any investment decisions.