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Ch.2 · Mutual Fund Structure Basics · medium

What is an aggressive hybrid fund as per SEBI categorisation?

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EXPLANATION

An Aggressive Hybrid Fund must invest 65–80% in equity and equity-related instruments and 20–35% in debt instruments. Since equity allocation is above 65%, it gets equity taxation treatment. It is one of the most popular hybrid categories.

A.A fund that invests 100% in equity during bull markets

B.A fund that invests 65–80% in equity and 20–35% in debt instruments [✓ Correct]

C.A fund that invests 50% in equity and 50% in debt at all times

D.A fund that invests 80–95% in equity with a minimum 5% in debt

EXPLANATION

An Aggressive Hybrid Fund must invest 65–80% in equity and equity-related instruments and 20–35% in debt instruments. Since equity allocation is above 65%, it gets equity taxation treatment. It is one of the most popular hybrid categories.

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