Are Balanced funds different from Aggressive Hybrid mutual funds? Or Is it the same?

Aggressive hybrid mutual funds are also known as equity oriented mutual funds. It is the same category that was previously called as balanced funds. After the re-categorisation by SEBI in May 2018, the name of the equity oriented hybrid category was changed from balanced funds to aggressive hybrid mutual funds. The confusion with the name of the category is common as a new category of mutual funds has been made and is named as balanced mutual fund. The new balanced funds invest equally in equity and debt instruments and hence are called balanced funds.

After the re-categorization by SEBI, hybrid mutual funds are grouped under 7 subcategories. These are named as:

• Balanced Hybrid Funds
• Aggressive Hybrid Funds
• Conservative Hybrid Funds
• Dynamic Asset Allocation Funds
• Arbitrage Funds
• Equity Savings Funds

It must be noted that, as per the latest norms, aggressive hybrid funds and balanced funds are two different subcategories of hybrid mutual funds. Hybrid funds with higher allocation in equity instruments and a lesser proportion in debt tools are called aggressive hybrid funds while nearly equal allocation between equity and debt tools are done in balanced mutual funds.