What sets aggressive equity funds apart?

I nvestors often make the mistake of investing in mutual funds without fully understanding the implications of the investment. One common area where investors are confused is with regards to aggressively managed equity funds.

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They invest in these funds without realising their true nature. The confusion occurs because investors are unable to fathom what gives such funds that 'aggressive edge'. In this note, we analyse the factors that set apart aggressively managed equity funds from other equity funds. At Personalfn, we maintain that a diversified equity fund should hold no more than 40 per cent of assets in the top ten stocks. This helps the fund counter stock market volatility more effectively. Aggressively managed funds usually have more than 40 per cent of their assets in the top 10 stocks.

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