Balanced Funds India Review

 

Balanced Funds India Review

Balanced funds is not the new concept in India. Basically the balance funds invest both in equity and debt and achieve the optimal balance of your portfolio.

Typically a balanced fund will invest in 70:30 proportion in equity and debt means a typical balanced fund will invest 70% in debt and 30% in equity. Or sometimes, 60:40 proportion depending on the stock market conditions.

And the fund manager of your balanced fund will try to maintain this ratio.

There are equity oriented balanced funds also. Means these funds basically invest 70% in equity and 30% in debt. When the market is in bull run, the equity oriented balanced funds will give you excellent returns.

The main advantage of investing in balanced funds is the protection of your capital as well as the growth. The equity component of your balanced fund will provide growth in the up market while a debt component will provide a stability in the down market.

Now, the obvious question is that, how to choose a best balanced fund in India? Well, I will advise you to visit some good mutual fund rating agency and follow its star ratings and choose the best balanced fund for you.

Valueresearchonline.com is one such reputed fund rating agency. On this website, the balanced funds are divided into following category. Basically they are also known as Hybrid Funds because they invest both in equity and debt.

01) Hybrid: Equity oriented
02) Hybrid: Debt Oriented
03) Hybrid: Asset allocation
04) Hybrid: Arbitrage

You can choose any category fund according to your risk appetite. Just make sure that you choose a 4-star or 5-star rated fund.

If your risk taking capacity is moderate than Balanced mutual funds are the best choice for you.

I am personally not a great fan of balanced mutual funds. I invest in pure equity diversified mutual funds for the equity exposure and in Bank FDs & PPF and debt mutual funds for the debt exposure of my wealth.