Ch.12 · Model Portfolios and Asset Allocation · medium
Which of the following fund categories is MOST suitable for an investor with a 4-5 year horizon who wants equity participation but with lower volatility than a pure equity fund?
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EXPLANATION
Aggressive hybrid funds invest 65-80% in equity and 20-35% in debt, providing equity growth potential while the debt component cushions downside. This makes them suitable for medium-term goals (3-5 years) where an investor wants equity exposure without pure equity volatility.
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