Balanced Mutual Funds - Best Balanced Funds to Invest in India (2024)

FAQs

What is best balanced mutual fund? ›

The investment objective of the Ideal Balanced Fund is to provide superior long-term capital appreciation and steady income while limiting risk through asset diversification with an emphasis on quality and liquidity.

"When selecting balanced funds and their desired allocation, investors typically consider factors like their risk tolerance, investment objectives and time horizon." Long-term investors looking for greater expected returns at the cost of higher risk may like AOA.

Creating a balanced Portfolio

As a general guideline, you can start with three to four different types of mutual funds, such as an equity fund, a debt fund, and potentially a hybrid fund or an index fund. This strategy can help you achieve diversification across asset classes and investment styles.

That can be good if you need stability, but this approach also reduces your long-term returns, since stocks tend to deliver much higher returns over time. So balanced funds may be better for those who need stability rather than the highest levels of returns, making them more suited to older investors.

Balanced funds are suitable for a medium-term horizon and are ideal for investors who are looking for a mixture of safety, income and modest capital appreciation.

Among the best choices for retirement income are balanced funds that own portfolios of stocks and fixed income, with a strong focus on dividends and interest income.

Taxation of Balanced Advantage Funds

Short-term capital gains are taxed at 15%, plus cess and surcharge. Long-term capital gains up to Rs 1 lakh are tax-exempt; any gains above Rs. 1 lakh are taxed at 10%, plus cess and surcharge.

Which is better equity or balanced fund? ›

Debt and balanced funds have a risk level of medium to low, which means the return could be low. But the chances of you losing your capital are also low. In terms of equity funds, the risk factor is higher, which means you get better returns, but the chances of losing the capital are also higher.

As bond and equity markets do not move together, balanced funds use diversification to allow individuals to participate in market gains without the substantial risks involved with pure equity funds. If the stock market is tanking, odds are the bond market will remain relatively stable or maintain an upward trend.

1. Current NAV: The Current Net Asset Value of the Nippon India Balanced Advantage Fund as of Sep 13, 2024 is Rs 174.18 for Growth option of its Regular plan. 2. Returns: Its trailing returns over different time periods are: 24.89% (1yr), 12.79% (3yr), 14.19% (5yr) and 15.49% (since launch).

All that volatility can cause people to panic and sell their investments, hurting the long-term growth of their portfolios. Balanced funds add bonds and perhaps other assets to help reduce volatility, and can help you stay invested in a downturn.

A balanced portfolio invests in both stocks and bonds to reduce potential volatility. An investor seeking a balanced portfolio is comfortable tolerating short-term price fluctuations, is willing to accept moderate growth, and has a mid- to long-range investment time horizon.

Therefore, if your portfolio objective is balanced growth and income, for example, you can expect a long-term average return between 4.5% and 6.5%. Each portfolio objective shown below includes a mix of equity and fixed-income investments that should reflect your comfort with risk and your investment time frame.