ARE YOU LOOKING FOR STABLE RETURNS ON YOUR INVESTMENT?
BALANCED FUND
Investors want to earn maximum returns from their investments, but do not venture into equity because of the risk involved. And hence, many Equity investors eventually land up becoming Debt investors. Balanced Fund is a solution to such investors' needs.
WHAT IS A BALANCED FUND?
Balanced Fund is a category of hybrid mutual funds that invests in a combination of debt and equity, with a view to provide capital appreciation by investing in the equity asset class and contain risk by investing in debt securities.
A Balanced Fund invests 65% or more of its portfolio in Equity and 35% or less in Debt.
Balanced Funds are designed to offer superior long-term returns generated from common stocks and offer protection to capital through investment in Debt.
WHY SHOULD YOU INVEST IN A BALANCED FUND?
▸ Tax Benefits:
Since a Balanced fund invests more than 65% of its portfolio in Equity, it is treated as an equity fund for taxation purposes. Capital appreciation after holding the investment for more than a year is considered a long-term capital gain and is tax-free in the hands of the investor.
▸ Less Volatile:
The inclusion of a significant portion of Debt in the portfolio protects your investment from downturns.
▸ Returns:
Balanced Funds rise with a rise in markets; hence, the investor gets an opportunity to earn in growing markets.
▸ Diversification:
A balanced fund helps the investor diversify his money between debt and equity through a single investment.
Investing in a balanced fund is the best bet for a first-time investor, among others. The return and risk appetite of a new investor is generally different than that of a mature investor and balanced funds satiate the desire to grow by investing in stocks as well as limit the risk by investing in debt.
…FD VS BALANCED FUND…
PERFORMANCE
TENURE: The above chart shows the performance of average balanced funds in India on an annualized basis. *Data as of 31st March, 2022
Disclaimer: The figures/projections are for illustrative purposes only. The situations/results may or may not materialize in the future. Mutual Fund investments are subject to market risk, Read all scheme-related documents carefully. Past performance may or may not be repeated in the future.
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