These 8 Aggressive Hybrid Funds Outperformed a Hybrid Index Consistently

Have actively managed aggressive hybrid funds managed to beat a hybrid index? This is a performance comparison with CRISIL Hybrid 35+65 - Aggressive Index

This is an image of a racetrack with 8 lanes representing the 8 Aggressive Hybrid Funds Outperformed a Hybrid Index Consistently

Published: February 11, 2020 at 12:24 pm

Last Updated on

We find 8 (out of 16) aggressive hybrid funds managed to consistently outperform a hybrid index, the CRISIL Hybrid 35+ 65 aggressive Index suggesting a need for a hybrid index fund.

We have previously seen how large caps and mid caps have trouble beating respective indices: (1) Only Five Large Cap funds have comfortably beat Nifty 100! (2) Only 6 Midcap Mutual Funds beat Nifty Midcap 150 in the last 5 years (3) Only 3 midcap mutual funds have beat Nifty Next 50 consistently!

Let now find out how aggressive hybrid funds have fared against a hybrid index comprising of S&P BSE 200 (65%) and CRISIL Composite Bond Fund Index (35%). This is the methodology document of the index.

The normalised index values in ACF MF (a paid mutual fund analysis tool) was used for this study. It is a pity that hybrid indices are not freely accessible in the NSE (although the other indices are).

For this study, we shall consider rolling returns. That is, we shall compare every possible 1,2,3,4 and 5 year return periods possible from 1st Jan 2013 (from the inception of direct plans) to Feb 10th 2020. We shall only consider funds that have enough history to generate 500 or more  5-year rolling return data points.

This is the full list of 16 funds currently classified as aggressive hybrid. It is possible that some of these funds had a different investment mandate in the past. All funds are direct plans

Join our 1200+ Facebook Group on Portfolio Management! Want to know how to reduce fear, doubt and uncertainty while investing for financial goals? Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community
  1. HDFC Children’s Gift Fund Investment Plan
  2. SBI Equity Hybrid Fund
  3. Principal Hybrid Equity Fund
  4. ICICI Prudential Equity & Debt Fund
  5. Canara Robeco Equity Hybrid Fund
  6. DSP Equity & Bond Fund
  7. Reliance Equity Hybrid Fund
  8. L&T Hybrid Equity Fund
  9. Franklin India Equity Hybrid Fund
  10. Aditya Birla Sun Life Equity Hybrid’95 Fund
  11. Tata Hybrid Equity Fund
  12. Baroda Hybrid Equity Fund
  13. UTI – Hybrid Equity Fund
  14. HDFC Hybrid Equity
  15. JM Equity Hybrid Fund
  16. LIC MF Equity Hybrid Fund

Five years: 14/16 funds have outperformed CRISIL 35:65 with a consistency of 70% or more. For example, Tata Hybrid Equity Fund (direct plan) had got a better return than the index over five years 405 out of 515 times or 79%. We shall refer to this performance consistency.

Four years: Only 8/16 funds managed 70% or more performance consistency!

Three years: Only 8/16 funds managed 70% or more performance consistency!

These eight funds qualify over 3,4 and 5 year periods with 70% or more consistency.

  1. Principal Hybrid Equity Fund
  2. HDFC Children’s Gift Fund
  3. Canara Robeco Equity Hybrid Fund
  4. SBI Equity Hybrid Fund
  5. ICICI Prudential Equity & Debt Fund
  6. DSP Equity & Bond Fund
  7. Reliance Equity Hybrid Fund
  8. HDFC Hybrid Equity

This again highlights the need for a low-cost index fund tracking a hybrid index. However, this is unlikely to happen. At the very least, SEBI should mandate all benchmark data is publically available. I was informed these indices can cost several lakhs a year (that is for just a table of date and value!). This is peanuts for AMFI.

Investors should be aware that portals like Value Research use their own hybrid category indices. Using these indices for comparison (and rating) can lead to incorrect results. Considering the presence of a minimum 65% stocks in these funds, Nifty or Sensex can be used as at least a secondary benchmark.

Do share if you found this useful
Join our 1200+ Facebook Group on Portfolio Management! Want to know how to reduce fear, doubt and uncertainty while investing for financial goals? Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community

Hate ads but would like to support the site? Subscribe to our ad-free newsletter and get beautifully formatted full articles delivered to your inbox!

About the Author

Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.
He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com

About freefincal & its content policy

Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. We operate in a non-profit manner. All revenue is used only for expenses and for the future growth of the site. Follow us on Google News
Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any kind of paid articles, promotions or PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)

Connect with us on social media

Our Publications


You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingThis book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.
   

Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want

Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new

This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when traveling, how traveling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)  

Free Apps for your Android Phone

Comment Policy

Your thoughts are the driving force behind our work. We welcome criticism and differing opinions.Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.

2 Comments

    1. It has not completed 5yrs. So there is not enough data points to ascertain that it has consistently beaten its benchmark in terms of returns.

Leave a Reply

Your email address will not be published. Required fields are marked *