Balanced mutual funds can be equity oriented or debt oriented hybrid funds.
If the average equity exposure of balanced fund is more than 60% and the remaining 40% is debt products then it is treated as Equity Oriented Balanced Fund. This means major portion of the funds are invested in equity.
If the average debt exposure is around 60% and equity is 40% then these funds are treated as Debt Oriented Balanced Funds.
If you do not wish to take too much risk, but wish to have exposure into equities, balanced funds are a good way forward. These funds are less volatile, and when the markets fall, they are hurt less than others.
Balanced funds are a tax efficient way of having a debt exposure. These funds are treated like equity funds for taxation. Dividends from these funds are tax-free and there is no tax on long-term equity gains.
Balanced funds are suitable for investors with a moderate risk profile and investment horizon of over three years. On the equity side the fund is managed actively based on valuations in the market, as the portfolio is constructed keeping in mind the conservative risk profile of investors. This could also be a product for maiden investors to start off with, owing to lower volatility and tax benefits. Being a product that works across market cycles, and aims to offer the benefits of asset allocation, this product could form part of investors’ core portfolio.
Best Balanced Mutual Funds
Here is the list best balanced mutual funds you can invest in 2017
HDFC Balanced Fund
ICICI Prudential Balanced Fund
DSP BlackRock Balanced Fund
Birla Sun Life Balanced 95 Fund
Franklin India Balanced Fund
L & T India Prudence Fund
Canara Robeco Balance
SBI Magnum Balanced Fund
Tata Balanced Fund
Reliance Regular Savings Fund – Balanced