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A balanced fund is an investment fund which invests in both equity and debt instruments. They are also known as equity-oriented hybrid funds. The purpose of the fund is to balance the risk-reward ratio and ensure a healthy return for the investor.
Since it is a low-risk investment, it is a suitable option for first time investors. In short, when you want the best of both from the world of capital market investment, you can opt for a balanced fund. A typical balanced fund invests 50% to 70% of their portfolio in stocks and the remainder of their resources in bonds and other debt instruments. However, there is also a category of balanced funds defined by SEBI:
|Types of Balanced Funds||Equity %||Debt %|
|Aggressive Hybrid Fund||65-80%||20-35%|
|Balanced Hybrid Fund||40-60%||40-60%|
|Conservative Hybrid Fund||10-25%||75-90%|
|Dynamic Asset Allocation Fund/Balanced Advantage Fund||No Limit||No Limit|
|Multi-Asset Allocation Fund||At least 10% in each asset class (equity, debt, gold)||At least 10% in each asset class (equity, debt, gold)|
|Equity Savings Fund||65% minimum||10% minimum|
You should invest in Balanced Mutual Funds because Best Balanced Mutual Funds have given better risk-adjusted returns in the long run compared to equity returns. If you are a first time investor, a balanced mutual fund is a good investment option.
The documents required to purchase this fund are as follows:
Is a balanced fund a good investment?
Yes, if you are a first time investor, a balanced funds are suitable investment option.
Is it a right time to invest in balanced fund?
It is always a good time for investment. Everyone should have at least one balanced fund in their investment portfolio.
What are aggressive hybrid funds?
Aggressive hybrid funds are balanced funds which primarily invest 65% to 80% in equity instruments, while the remainder is invested in debt instruments.
What is a good balanced mutual fund?
A few good balanced funds have been mentioned above.
What is the difference between hybrid fund and balanced mutual fund?
There is no difference between a hybrid and balanced fund, both are the same.