Aggressive Hybrid Mutual Funds

An aggressive hybrid fund is a mutual fund that keeps most of its money in company shares and the rest in debt. A mutual fund is a pool of money from many people, invested by a professional manager under rules set by SEBI, the market regulator. A hybrid fund mixes asset classes, mainly shares and bonds. Equity means shares of companies. Debt means loans to governments, banks or companies, in the form of bonds and similar paper.

Between 65% and 80% of total assets must sit in equity and equity-related instruments. Between 20% and 35% must sit in debt. SEBI's own one-line description is "An open ended hybrid scheme investing predominantly in equity and equity related instruments". Open ended means you can buy or sell units on any working day.

Equity-related is wider than plain shares. SEBI's range counts shares and 'equity-related' holdings together. That includes REIT units, convertible bonds and equity derivatives (contracts linked to share prices). A REIT, or real estate investment trust, is a trust, not a company. That matters for tax.

In the funds on this list at the end of August 2026, shares made up roughly two-thirds to four-fifths of the portfolio. There is no lock-in, a period during which you cannot sell at all. When you do sell, the fund must pay you within 3 working days.

It can fall a long way, because 65% to 80% of its money sits in equity.

An index, such as the NIFTY 50, is a list of companies picked by fixed rules.

Suppose you invest ₹2,28,000. Suppose the fund's shares fell 38.4%, as the NIFTY 50 did from 14 January to 23 March 2020, and its bonds held their value.

• At 65% in shares: ₹1,48,200 is in shares. A 38.4% fall takes off about ₹56,909, leaving about ₹1,71,091.
• At 80% in shares: ₹1,82,400 is in shares. The same fall takes off about ₹70,042, leaving about ₹1,57,958.

That is arithmetic on an assumption, not what any fund did. When interest rates rise, bond prices tend to fall, and when rates fall, prices tend to rise (SEBI's investor website says this). So the bond part of the fund can also lose value when interest rates rise.

The riskometer is the risk label SEBI makes every fund show, on six levels from Low to Very High, checked every month. Nearly every listed aggressive hybrid fund read Very High on 29 September 2026. For a fund holding shares and bonds, SEBI scores each part, weights it by its share of the fund and adds the parts up. Even with the calmest large company shares and government bonds, SEBI's formula cannot score a fund with 80% in shares below High.

If a sharp fall does come, Koshex talks you through it before you redeem (sell your units).

Not every one: only a fund whose Indian listed shares average at least 65% over the year gets equity tax rates. The test comes from the Income-tax Act, 2025, and it is narrower than SEBI's rule.

• SEBI's category rule counts shares and 'equity-related' holdings such as REIT units and foreign shares.
• The tax test counts only shares of Indian companies listed on an Indian exchange. A listed company is one whose shares trade on a stock exchange. These must make up at least 65%, measured as the annual average of the monthly averages of the opening and closing figures.

So a fund can meet SEBI's floor and still miss the tax test. Picture a fund at SEBI's 65% floor with a few per cent in REIT units or foreign shares. Its Indian listed shares would fall below 65%.

A fund that passes is an equity-oriented fund for tax. If a fund misses the equity test, it is not taxed as a debt fund either. The debt-fund rule (a Specified Mutual Fund) needs more than 65% in debt, and this category holds at most 35%. Its gains follow the general rule: slab rate up to 24 months, 12.5% after that. Your slab rate is the income-tax rate that applies to your other income.

Whether your fund is taxed as equity depends on what it actually held over the year. Some fund houses say so in the factsheet or scheme document; if yours does not, ask the fund house before relying on equity tax rates.

Sometimes market moves push a fund outside its SEBI range through no action of its own. SEBI then gives it 30 business days to rebalance, which means buying or selling to bring the mix back inside. The fund house's investment committee can extend that by up to 60 business days. A fund still outside after that may not charge an exit load to investors who leave. An exit load is a fee for selling within a set time after buying.

What you pay depends on whether the fund met the equity test and how long you held the units. Suppose you sell units for an assumed gain of ₹1,93,000. Assume it is your only equity gain that tax year and your total income is up to ₹50 lakh, so no surcharge applies. Surcharge is an extra charge on the tax once total income passes ₹50 lakh. Cess is an extra 4% charge on the tax, the Health and Education Cess.

The holding period is how long you owned a unit, from the day you bought it to the day you sell it. In an equity-oriented fund, a gain on units held 12 months or less is a short-term capital gain. After 12 months it is a long-term capital gain.

• Meets the equity test, held over 12 months: 12.5% on the ₹68,000 above the ₹1,25,000 yearly exemption is ₹8,500, plus ₹340 cess: ₹8,840.
• Meets the equity test, held 12 months or less: 20% on the whole ₹1,93,000 is ₹38,600, plus ₹1,544 cess: ₹40,144.
• Misses the equity test, held over 24 months: 12.5% on the whole gain, with no exemption, is ₹24,125, plus ₹965 cess: ₹25,090.

If the fund misses the test and you held 24 months or less, the gain is taxed at your slab rate. The ₹1,25,000 exemption is one yearly allowance across all your equity-oriented long-term gains, not one per fund.

There is no TDS (tax deducted at source, before money reaches you) on a resident's gains from selling units. IDCW is different: a payout from the fund's income or gains, which lowers the NAV (the price of one unit) by the amount paid. You pay tax on it at your slab rate. Once your IDCW from a fund house crosses ₹10,000 in a tax year, it deducts 10% TDS on the whole amount.

They differ in how much freedom SEBI gives each fund over its mix of shares and debt.

• Aggressive hybrid: a fixed range of 65% to 80% in equity and 20% to 35% in debt. That is more in shares than a balanced hybrid fund's 40% to 60%. Equity tax rates apply only if the fund meets the 65% Indian listed shares test.
• Balanced hybrid: a fixed middle range, 40% to 60% each in equity and debt. With neither side above 60%, it is taxed as neither equity nor debt while in range. Most listed balanced hybrid funds read High or Very High on 29 September 2026.
• Dynamic asset allocation: no fixed range. SEBI says only that the mix of equity and debt is "managed dynamically", with no minimum or maximum. Since 26 February 2026, the official category name includes Balanced Advantage Fund. Its tax depends on what each fund actually held on average. Most listed dynamic asset allocation funds read Very High on 29 September 2026.

Koshex suggests 3 to 5 years for balanced hybrid and dynamic asset allocation funds, and 5 years or more for aggressive hybrid.

An aggressive hybrid fund can fit money with five years or more to run, held by someone who can watch it drop without selling. Five years is Koshex's suggestion, not a SEBI rule.

Picture a goal such as buying a small plot of land in your home town in about seven years. Money like that is less likely to be needed in the middle of a fall.

How much fits depends on your horizon, what else you already hold and how large a fall you could live with.

A regular plan is the version of a fund bought through a distributor such as Koshex, who helps you choose and stays with you afterwards. A distributor is a registered intermediary that helps you buy and manage funds; Koshex holds AMFI registration ARN-154632. Koshex helps you choose a fund that suits your goal and timeline. After that, it reviews your holdings over time and flags changes, such as a fund's category, risk or ranking shifting.

Check each fund's returns against the category averages, then its risk, cost and exit load. There are 34 listed aggressive hybrid funds in the regular plan, growth option, holding ₹2,74,737 Cr between them. The growth option pays nothing out and keeps the money invested. AUM (assets under management) is the current value of the money a fund manages. Of these, 31 have a three-year record; they are ranked on 3-year return and counted in the averages.

• CAGR: the average yearly growth rate over a period, as if the fund had grown at the same pace every year. Set a fund's 3-year and 5-year CAGR against the category averages, 4.3% over three years and 8.7% over five. Past returns do not tell you the next three years.
• Riskometer: check the fund's own level.
• Expense ratio: the fund's yearly fee, shown as a percentage of your money and taken out of the fund's value.
• Exit load: a fee some funds charge if you sell within a set time after buying. SEBI does not set an exit load for this category. Each fund's scheme document gives its own. Many charge one on units sold within a year, or within 30 days, and some let you take out part of your units free. There is no lock-in.

The list also includes a couple of index funds that track a fixed mix of a share index and a government bond index. SEBI treats them as index funds, so they follow their index rather than this category's rules. It also includes a few funds of funds, which invest in other mutual funds rather than directly in shares and bonds. They are taxed differently from the funds they hold; check the scheme document.

A SIP invests a fixed amount at regular intervals, usually monthly. A lumpsum puts a larger amount in at one time. In an equity-oriented fund, each SIP instalment starts its own 12-month clock for tax.