New Delhi, Nov. 14 -- Aggressive hybrid and equity savings funds are two categories of hybrid mutual funds that are required to invest at least 65% of their assets in equity. However, despite this common minimum allocation, the two categories differ significantly in their investment strategies, risk levels, and return potential.

While aggressive hybrid funds take higher exposure to equity markets to generate long-term growth, equity savings funds use a combination of equity, arbitrage and debt. Here's what each category means, how they differ in risk, and which one has delivered better returns.

According to SEBI's mutual fund categorisation norms, aggressive hybrid funds must invest:

These funds primarily invest in unhedged equities, m...