Hybrid, Value Funds Gain in Volatile 2025 Market

In 2025, Indian mutual fund investors are increasingly turning to hybrid and value-oriented funds for stability and growth amid ongoing market volatility and uncertainty over interest rates. Aggressive hybrid funds, which balance equity and debt, are recommended for conservative equity investors seeking long-term wealth creation with reduced volatility. Value mutual funds have gained popularity as broader market rallies favor undervalued stocks, while large-cap and focused equity funds continue to deliver strong performance, with some large-cap schemes posting over 20% annualized returns in the past three years. The Federal Reserve's cautious approach to rate cuts has prompted experts to advise prioritizing safety through large-cap value funds. Sectoral, small-cap, and mid-cap funds remain suitable for aggressive investors with higher risk tolerance and patience for market cycles. Ultimately, investment choices should align with individual risk tolerance, investment horizon, and a careful review of past performance within fund categories.