Balanced Funds: An Overview
Balanced Funds are a kind of mutual fund scheme which offer Investors security, returns and moderate capital appreciation. These funds are also known as Hybrid Funds. Here the funds are invested in certain proportion in Equities as well as Bonds. The idea of the fund is protect the investment of the investor and provide decent return at the same time. These are considered as safer investment option as the fund is diversified in fixed return investments as well as equity which depending on the market scenario can yield positive or at times negative returns as well. But as per the data provided by the Stock Exchange the equities do provide positive and good returns over a longer period of time. Hence we can say for Conservative investor Balanced Fund is the best form of investment. The debt market instruments lend stability and protection from volatility while Equities ensures capital acceleration and high return on the investment.
FEATURES OF BALANCED FUNDS
- You can allocate the Funds according to your choice in Debt Instruments and Securities. Generally (70% Equities and 30% Debts) combination is followed by the Balanced Funds. But different allocation pattern are also available for the investors.
- It provides shield against Market Volatility and protects investment.
- Provides the best growth plan as it makes most of the market scenario as Equities add to the value when market is doing well and Debts Instruments add value when the market is underperforming.
- Over the years Balanced Funds have a proven track record and given return in excess 15% in the last decade.
- It can also help you meet your short term goals (3-5 years) as the return on the Investment even during short tenure is decent.
- It provides ease of investment and you can choose the amount which you want to invest.
- Individuals who don’t have much knowledge about the Market dynamics can also easily invest in it with little or no guidance at all.
- The tracking of the performance is very easy and one can always monitor how the fund is performing over a period of time.
- Many Balanced Mutual Funds are available in the market and based on the performance one can choose from them.
- One of the most preferred Mutual Fund Investment option.
I will write about the performance of various Mutual Fund Schemes in my upcoming posts.