Synopsis– In 2025, hybrid mutual funds have been a true success story amid volatile markets as they generated from 166 to 243% absolute returns over 5 years (Oct 2020-Oct 2025), which translates to a CAGR of 21-28%. They are perfect for an SIP investor as these funds have beaten the benchmarks to offer balanced growth in a scenario of 7% GDP and 12% income growth.
Hybrid mutual funds are a clever all-rounder in the world of investment. For one, it combines the best of both: the rise of the market through equity (shares) and the stability through debt (bonds). Such a combination is what allows investors to control their risk exposure and at the same time to strive for high returns hence the popularity of mutual funds among investors, who want an even more reliable way to grow their capital in the long run.
Top 10 Hybrid Funds: Exceptional Choices for Stability and Growth
1. Quant Multi Asset Allocation Fund
- 5-Year Absolute Return: 242.5% (CAGR: 27.8%)
- 3Y Annualized Return (Proxy for SIP XIRR): 23.2%
- Key Features: Multi-asset blend (equity, debt, gold) for effective diversification; opportunistic allocation allowing outperformance in a volatile environment.
- Why Outperformed?: A strong shift in assets; the 10-year CAGR of 18.1% shows long-term performance.
- Investor Fit: Investors looking for aggressive growth; individuals willing to take on risk for multi-asset performance.
- Risks: Volatile, due to dynamic investment style; concentrated investments.
2. ICICI Prudential Equity & Debt Fund
- 5-Year Absolute Return: 226.8% (CAGR: 26.5%)
- 3Y Annualized Return (Proxy for SIP XIRR): 21.1%
- Key Features: Aggressive hybrid (65-80% equity, rest debt), predominantly equity growth with downside protection.
- Why Outperformed?: Balanced returns in bad markets; consistent returns with a 10-year CAGR of 17.0%.
- Investor Fit: Moderate risk takers; for those looking to grow wealth with some stability.
- Risks: Market impacts from equity performance; interest rate sensitivity of the debt.
3. ICICI Prudential Multi Asset Fund
- 5-Year Absolute Return: 216.0% (CAGR: 25.7%)
- 3Y Annualized Return (Proxy for SIP XIRR): 21.1%
- Key Features: Diversified strategy among equity, debt, and commodities for resilience in all environments.
- Why Outperformed?: Diversified multi-asset exposure to fluctuations; a 10-year CAGR of 17.0%.
- Investor Fit: Balanced investors who want a broader exposure.
- Risks: Commodity/gold underperformance is relative; equity volatility.
4. HDFC Balanced Advantage Fund
- 5-year absolute return – 210.0% (CAGR: 24.9%)
- 3-year annualized return (proxy for SIP XIRR) – 20.6%
- Key Features – Tactical equity-debt allocation for risk-calibrated growth.
- Outperformance Drivers – Tactical shifts during buy phases; 10 year CAGR is 15.1%.
- Investor Suitability – Conservative investors wanting exceptional growth.
- Risks – Potential underperformance in protracted bull phases; reliant on the debt cycle.
5. Bank of India Mid & Small Cap equity & debt fund
- 5 year absolute return – 203.4% (CAGR: 23.7%)
- 3 year annualized return (proxy for SIP XIRR) – 20.43%
- Key Features – Aggressive hybrid focused on mid/small cap equity.
- Outperformance drivers – Exposure to high growth small cap stocks; strong recent month quarters.
- Investor Suitability – Strong risk appetite wanting ultimate upside.
- Risks – Volatility of small cap portfolios; corrections can be brutal in a falling market.
6. Quant Aggressive Hybrid Fund
- 5 year absolute return – 181.0% (CAGR: 23.0%)
- 3 year annualized return (proxy for SIP XIRR) – 14.6%
- Key Features – Majority in equity for aggressive growth.
- Outperformance drivers – Strong value based investing; 10 year CAGR of 16.8%.
- Investor Suitability – Investors with strong volatility tolerance.
- Risks – Very high equity in bear or correcting markets.
7. JM Aggressive Hybrid Fund
- 5 year absolute return – 176.1% (CAGR: 22.6%)
- 3 year annualized return (proxy for SIP XIRR) – 23.2%
- Key Features – Hybrid fund with strong majority in equity for momentum.
- Outperformance drivers – Consistent quarterly distributions; 10 year CAGR of 13.7%.
- Investor Suitability – Investors looking for growth with moderate risk.
- Risks – Limited track record compared to average hybrids; costly equity underperformance.
8. ICICI Prudential Retirement Fund – Hybrid Aggressive Plan
- 5-Year Absolute Return: 178.0% (CAGR: 22.6%)
- 3-Year Annualized Return (Proxy for SIP XIRR): 22.6%
- Key Features: A hybrid, aggressive scheme focused on retirement.
- Outperformance Rationale: Long equity bias
- Investor Fit: Goal-based (retirement) Investors who are happy with steady growers
- Risks: Stable Investors looking to sleep at night, should think twice about high equity
9. Edelweiss Aggressive Hybrid Fund
- 5-Year Absolute Return: 166.6% (CAGR: 21.9%)
- 3-Year Annualized Return (Proxy for SIP XIRR): 20.1%
- Key Features: Aggressive equities with a portion in debt.
- Outperformance Rationale: 10 Year CAGR was 14.1%; and among rotations done.
- Investor Fit: Loyalists of Edelweiss, those comfortable with moderate aggression
- Risks: Market-driven volatility swings
10. Mahindra Manulife Aggressive Hybrid Fund
- 5-Year Absolute Return: 166.4% (CAGR: 21.8%)
- 3-Year Annualized Return (Proxy for SIP XIRR): 19.6%
- Key Features: An aggressive fund that fits long-term investors.
- Outperformance Rationale: It was equities tilted with diversification.
- Investor Fit: Balanced growth seekers
- Risks: Volatility during corrections
- Values as per the grow app
Conclusion
These hybrid powerhouses combine growth potential with risk control, being the perfect choice for the uncertainties of 2025 – a SIP will be the best option to achieve 20%+ returns. You can diversify 3-5 to achieve the optimal balance; hybrids are the one who will win the battle against bad weather.
Written By Rachna Rajput
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