New Delhi, Sept. 18 -- Investors looking to gain stock market exposure often turn to equity funds, especially large-cap funds, to reduce volatility. However, one hybrid category also offers meaningful equity exposure while combining it with debt.

Under SEBI's categorisation, aggressive hybrid funds invest 65-80% of their total assets in equity, with the remaining 20-35% in debt instruments. However, large-cap funds must invest at least 80% of their total assets in large-cap stocks.

A comparison of category-average returns shows that the two categories have delivered broadly similar returns over the long term. Here's what you need to know about risk-adjusted performance.

Aggressive hybrid funds recorded higher category-average returns a...