A Balanced fund is one of the best investment options for investors with low-risk appetite. Investing in a Balanced mutual fund means enjoying best of both worlds – equity and debt. Balance mutual funds make an investment in both equity and debt. The combination of equity and debt helps investor for wealth creation at low risk or less volatility compared to pure equity funds. Looking at the benefit of balanced fund you must be keen to make an investment in it. Here are Top 5 Best Balanced Funds to Invest in India with a minimum investment horizon of three years.
What is Balanced Funds?
Balance Funds keeps a balance between equity and debt as they invest in both instruments. The asset allocation ratio of these funds depends on fund objective. These type of mutual funds are less risky and generate moderate returns.
Also Read – Best Balance Mutual Funds for Investment – Benefits and Returns
Selection Factors for Balanced Funds
You should consider following factors for selecting balanced funds –
Asset Size – Asset Size of a fund should be reasonable threshold level. I have selected fund with minimum Asset Size of 500 Cr.
Past Performance – Past performance is one more indicator for the selection of right mutual funds. I have considered past five years’ fund performance history.
Expense Ratio & Exit Load – Expense ratio and exit load is another important factor for the selection of mutual funds. I have tried to locate balance mutual fund with lower expense ratio.
Fund Rating – Fund rating is another important factor for the selection. You should look for CRISIL as well as Value Research fund rating I have selected fund with rating 3 star and above.
Fund Manager Profile – You should ideally look for detail about fund manager. Fund manager should be experienced and capable of generating good returns. I have shortlisted funds which are managed by an experienced fund manager.
Also Read – Top 10 Direct Mutual Funds – 5 Star Rating by Value Research Online
Top 5 Best Balanced Funds to Invest in India -2018
HDFC Balanced Fund (G)
Returns – For 1 Year – 12.3%, For 3 Years – 10.5%, For 5 Years – 19.8%
Risk – Moderately High
HDFC Balanced Fund is 5 Star rated fund. It is one of the best-balanced funds for investment. Past performance history of this fund is very good. The expense ratio of this fund is low. This fund invests in a mix of large-cap and mid-cap stocks.
ICICI Prudential Balanced Fund (G)
Returns – For 1 Year – 10.4%, For 3 Years – 10.6%, For 5 Years – 18.7%
Risk – Moderate
ICICI Prudential Balanced Fund is 4 Star rated fund. ICICI Prudential Balanced fund has given a very good performance in the past. This fund invests 60-80% in the equity. Major fund holding of this fund is in large cap.
DSP Blackrock Balanced Fund
Returns – For 1 Year – 9.7%, For 3 Years – 9.9%, For 5 Years – 17%
Risk – Moderately High
DSP Blackrock Balanced fund is 4 Star rated fund. Over the long run, this fund has generated very good returns for the investors. An expense ratio of this fund is low. It is hybrid equity oriented scheme managed by an experienced fund manager.
Also Read – Top 20 Best Mutual Funds SIP to invest in India for 2018
Aditya Birla Sun Life Balanced 95
Returns – For 1 Year – 9.5%, For 3 Years – 9.7%, For 5 Years – 17.9%
Risk – Moderate
Aditya Birla Sun Life Balanced 95 fund is one of the oldest funds. It’s 3 star rated fund offering risk-free returns to the investors. This mutual fund invests in blue chip and large cap stocks. An expense ratio of this fund is slightly high.
L&T India Prudence Fund – Direct
Returns – For 1 Year – 12.3%, For 3 Years – 11.1%, For 5 Years – 20.9%
Risk – Moderate
It is 3 Star rated fund by CRISIL India. Over the long run, this fund has delivered very good returns to the investors. It is direct fund so expense ratio of this fund is very low. It is managed by Experience fund managers.
Things to know before Investing in balanced mutual funds –
- Balanced funds are not completely risk-free. Major portion of this fund is invested in equity which is not entirely risk free.
- Balanced mutual funds does not guarantee any fixed return. Even dividend payout is not guaranteed.
- Balance mutual fund is not income generation fund. It is not product for retirees.
Also Read – ELSS Mutual Fund – Best way to Save Tax and Generate Wealth
Benefit of Investing in Balance Mutual Funds –
- Balanced funds help investors to get diversification in the portfolio as it invests in both equity and debt instruments.
- These type of fund are comparatively safe as a certain portion of the money is invested in debt instruments.
- These funds are less volatile as a downturn in the market affects this fund very less.
- Balance mutual funds help to rebalance your portfolio.
- Balance mutual funds are best for the beginner or first time investor as it is risk-averse.
Balanced funds are one of the best investment options for moderate risk taker investors. These fund gives peace of mind and balance in asset allocation. So, what are you waiting for? Invest in best balance mutual funds and enjoy the benefits.
Have you invested in any of Balance Mutual Funds mentioned above?
Do you think balance mutual fund is good for investment?
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