We all would like to maintain a balance between professional and personal life . Both are equally important to lead a successful, happy and healthier life. All doctors suggest us to eat a healthy balanced diet.
Investing in Balanced Mutual Funds is not much different. Balanced funds are also known as Hybrid Mutual Funds. In this post let us understand more about types of balanced funds and investment returns from these funds (especially equity oriented balanced funds).
What are Balanced (or) Hybrid Mutual Funds?
Mutual funds are broadly classified as either Equity or Debt,based on where the funds are invested.
What are different types of Balanced Funds?
Balanced mutual funds can be Equity oriented or Debt oriented hybrid plans.
If the average equity exposure of a balanced fund is more than 60% and the remaining 40% is in debt products then it is treated as a Balanced Fund – Equity oriented. This means major portion of the fund’s assets are invested in equity.
If the average debt exposure is around 60% and equity is 40% then these funds are treated as Balanced funds – Debt oriented. (These proportions can vary among different balanced funds).
Top performing Equity Oriented Balanced Funds
Systematic Investment Plans (SIPs) Returns of Balanced Equity Oriented Funds
The above table gives us idea about the SIP returns. I have assumed the monthly SIP amount as Rs 1,000.
Again, HDFC’s Children Gift Fund (Inv plan) tops the table with annualized returns of around 22% in the last 5 years. One more observation we can make on some of the very old funds. Example – HDFC’ s Prudence fund which was launched way back in 1993. This fund has generated SIP returns of around 23.18% in the last 15 years. The same fund tops the list in 10 year category, with returns of 18.95%.
The above past returns prove that investors will benefit if they stay invested for long periods of time.
What are the average returns of Balanced funds category?
The Below table gives us overall idea about the average returns generated by all balanced funds as a category.
The interpretation of data can sometimes be very tricky. For a different set of time periods, balanced funds might have given lesser returns. If our expectations are reasonable then I am sure balanced funds will deliver. I believe returns of 10% and above from a balanced fund (equity oriented) is a bonus.
Everything in life..has to have balance. It applies to investments too. I am sure you agree with me. Do you hold any balanced mutual funds? Share your views..Cheers!
(All the above plans are indirect plans, returns > 1 year are annualized and are Growth plans. Kindly keep in mind, past performance is no guarantee of future results- Image courtesy of Jeroen van Oostrom at FreeDigitalPhotos.net)
This post was last modified on July 10, 2023 11:47 am
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Dear Mr Sreekanth,
I want to invest about 25 Lakhs for 5 years. I am 44. Appreciate if you can suggest good funds.
Dear Mahendra,
You may consider one balanced fund (say 75%) & one MIP aggressive fund (25%).
ex : HDFC Balanced fund & Birla MIP II Wealth 25 fund.
Read : Best MIP funds.
Dear Sreekanth
I am naresh,I am very much new to the investment and interested in investing in MF by SIP of Rs:2000pm,with the time horizon of 20yrs
Can you please help me out which are the funds need to be am invested in
Main aim behind investing is good returns in long term which can be useful as am just 20
Thank you well in advance
Dear Naresh,
If your investment objective is wealth accumulation + tax savings, suggest you to invest in ELSS Funds.
Read : Best ELSS funds for 2016.
Else, you can consider investing in a diversified equity fund like Franklin prima plus & one mid-cap fund like HDFC Mid-cap opportunities fund.
Read : Best Equity funds for 2016.
Hi Sree - i am 34 and new to investments, i want to invest on long term basis for my childs future who is months old - my monthly investment range is INR 5000 - 10000, at this stage and shall increase YoY. Pl suggest some feasible options or combination of options please.
Dear usha,
Kindly read : Kid's education goal calculator.
Kindly start investing in a balanced fund and a mid-cap fund.
Read : Top Equity funds for 2016.
Do you have sufficient life insurance cover?
Hi Sree,
I have started investing 1 lac pa for 15 yrs from 2014 in HDFC Balanced Fund.
Is it a good option. Will i get enough corpus after 15 years.
Dear Ranjith,
It is indeed a good fund. You may consider investing in one more fund especially a mid-cap fund, considering your long-term view.
Kindly read : Best Equity mutual funds for 2016.
Kindly let me know what is ELSS Funds
Dear somashekar,
ELSS are equity oriented funds, wherein the fund corpus is invested in stocks/shares (min 65% of fund corpus) and the remaining in debt securities.
The fund units have a lock-in period of 3 years. The investemnts made in ELSS funds are eligible for tax deduction u/s 80c.
Kindly read:
Best ELSS Funds 2015.
Best ELSS Funds 2016.
I want to invest in tax saving mutual fund ? please suggest 2 3 best funds right now.
Also PPF is better of Mutual Fund ?
Dear balram..Let me know your investment horizon??
Hi Sree,
I want to invest 20-30K for 3-5yrs time period. Please suggest any plan which can help me in tax saving as well.
Is FD of 25-30K for 5yrs is good option?
Dear Sneha,
ELSS funds are good for long-term investments & for tax saving. But considering your investment horizon, balanced funds could be a better option. But do note no tax benefits is available.
Kindly read :
Think beyond taxes.Why one should avoid investing in FDs for longer period?
Thanks for your response Sree.
Yes, I am planning to invest in Balanced Fund, however, do want to invest in some Tax saving areas as well. Please suggest some links for ELSS funds.
Dear Sneha,
If you can remain invested for atleast 5 years or so, do consider investing in an ELSS fund.
Kindly read : Best ELSS funds.
Thanks Sree. Visited HDFC and they shared details about HDFC Life ProGrowth Plus. what is your suggestion on this ? Request your to pls help.
Dear Sneha,
Whom did you contact? HDFC Life insurance (or) HDFC Mutual Fund (or) HDFC Bank?
Hi Sree,
I contacted HDFC Bank.
Dear Sneha,
The plan suggested by hdfc bank is life insruance plan. Kindly do not buy it. You can visit hdfc mutual fund website directly and buy a balanced fund.
Kindly read : How to invest in direct plans of MFs.
If you are not comfortable buying online or direct, you can invest in MFs through online distribution platforms.
Great.. Thanks for all your help.. will go through it, and will let you know if any more help required.
Thnx...i have no knowledge about marketing and fund invest.i read your article and saw some pics of mutual funds..will you please clarify me 53.27% return for 3yrs...is it 53.27% per year or 53.27% for complete 2yrs?
Dear Ajay..The returns mentioned for the above funds are annualized returns.
Hi Sreekanth,
I am interested to start investing in Balanced Equity SIP's. I would like to know weather i will be able to monitor in which shares they are putting my money if i start investing in them? Please let me know.
Thanks in advance
Sivakumar.k
Dear Sivakumar..Yes, you can track fund(s) portfolios by visiting respective company website or on information websites like moneycontrol.com (or) valueresearchonline.com etc.,
Hi,
I am 34 years.
My salary is 18k.
I want to start my first mutual fund investment via sip for my kid.
Pls advice which fund to choose?monthy 1000 rupees.
Time horizon is 15 years.
Pls name few mutual fund to choose.
Dear Raju,
You may start your investments in MF with a balanced fund. Ex - HDFC Balanced fund / TATA balanced fund.