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What could be the threshold for the AUM of an aggressive hybrid fund?

Dhirendra Kumar sheds light on why the size of an aggressive hybrid fund shouldn't matter to investors


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What could be the threshold for the assets under management (AUM) of an aggressive hybrid fund?
- Praveen

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Size is not a barrier here, as aggressive hybrid funds are go-anywhere funds with substantial exposure to fixed income. For example, if Rs 100 has been invested in these funds, Rs 35 can have the high-yielding fixed income exposure, while the remaining Rs 65 doesn't necessarily have to be in mid or small caps. They can be invested anywhere between large, mid and small caps. So, in the case of aggressive hybrid funds, the AUM size is not a thing to worry about.

In fact, when the aggressive hybrid fund turns big, there will be an advantage of scaling. It will incur lower costs.

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