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Best Balanced Mutual Funds (Equity Oriented Schemes)

Last updated: June 15, 2016 | by

A well balanced life is very much essential for personal effectiveness, peace of mind and living well.  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. We need to have right and well-balanced diet to be healthy and fit.

Investing in Balanced Mutual Funds is not much different. Balanced funds are also known as Hybrid Mutual Funds. Personally I prefer investing in balanced funds to achieve my medium and long-term goals. I am a strong advocate of Balanced Funds. (Read : My Mutual Fund Portfolio)

Whether you are a novice or an experienced investor, investing in balanced funds can be fruitful. They can give you Diversified Equity funds like Returns but with a lower risk profile.

I have published an article on ‘ Best Balanced Mutual Funds ’ in 2014. It’s around 2 years back. So, let’s have a re-look at some of the Top and Best Performing Equity Oriented Balanced Funds.

In this post, let us discuss – What are Balanced Funds? What are different types of Balanced Funds? Which are the best Balanced Mutual Funds (equity oriented schemes)? How is the performance of Regular Plans Vs Direct Plans of Balanced Mutual Fund Schemes?

What are Balanced Funds? 

Mutual funds are broadly classified as either Equity or Debt, based on where a fund’s corpus is invested.

  • Equity funds primarily invest in stocks/shares.
  • Debt funds primarily invest in Bonds, Government securities and Fixed interest bearing instruments.
  • Whereas, Balanced Mutual Funds invest in both equity and debt instruments.

Types of Balanced Mutual Funds

Balanced Mutual Funds Hybrid Equity oriented Debt Oriented Mutual Fund Schemes

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 an Equity Oriented Balanced Fund. This means major portion of the fund’s assets are invested in equity (stocks).

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 fund schemes).

Top 5 Best Balanced Mutual Funds

As per my last review on Balanced Funds, I have suggested below schemes;

  • HDFC Balanced Fund
  • TATA Balanced Fund
  • HDFC Children’s Gift Fund – Investment Plan
  • HDFC Prudence Fund
  • ICICI Prudential Balanced Fund
  • Reliance Regular Savings Fund – Balanced option

If you have already invested or have active SIPs in any of the above balanced funds, you may continue with your investments. But, kindly note that there are certain drawbacks with Children oriented MF Schemes. So, you may have a re-look at HDFC Children’s Gift Fund. (Read: Children’s Gift Funds  – Comparison & Review)

If you are planning to make fresh investment s or SIPs, you may consider below Best Balanced Mutual Fund Schemes.

Best Balanced Mutual Funds Top Performing highly rated five star balanced funds Returns pic

  • There are around 59 Balanced Schemes (source – moneycontrol). The Balanced Fund Category has given an Average Returns of around 13.3% and 8.5% in the last 3 and 5 years respectively.
  • TATA Balanced Fund has been one of the best balanced funds for a long-time.  The fund has been a consistent performer. The fund has retained a four or five-star rating for the last seven years. The Fund’s strategy has been to allocate a slightly higher equity allocation. The current equity allocation is around 70% of the Fund’s portfolio. The fund’s equity portfolio consists of  primarily mid-cap companies. It has HIGH return grade with AVERAGE risk grade.
  • HDFC Balanced Fund’s returns and portfolio strategy is similar to that of TATA balanced fund. It also has around 70% equity allocation and has been primarily investing in Mid-cap oriented company shares. However, the fund has slightly reduced its allocation to mid & small cap companies over the last couple of years. The returns from TATA balanced fund & HDFC balanced fund are as good as some of the top performing pure Equity Funds. HDFC Prudence fund is also an another consistent performer from HDFC fund house. However, this fund now has a HIGH risk grade with an AVERAGE return grade. So, given a choice you can prefer HDFC Balanced Fund to HDFC Prudence Fund.
  • ICICI Prudential Balanced & Birla Sunlife Balanced ’95 funds have also been performing well. These funds have given returns of around 13.74% & 16.12% in the last 10 years respectively.
  • I have replaced Reliance Regular Savings Fund – Balanced option scheme with SBI Magnum Balanced Fund.
  • Watch out for lock-in period and Exit Load on HDFC Children’s Gift fund. The investments in this fund have to be made in the name of Children who are below 18 years of age.
  • Two more balanced funds to watch out for are L&T Prudence and Franklin India Balanced Funds. Let’s have an eye on their performances.

Balanced Funds : Direct Plans Vs Regular Plans – Returns Comparison

Below table gives you an idea about why investing in Direct plans is beneficial. The returns on Balanced Funds – Direct Plans are higher than the Regular plans. The difference in returns is as high as 1% in most of the cases.

Returns comparision Best Balanced Funds Direct plans Vs Regular plans Growth pic

(Read: What are Direct Plans of Mutual Fund Schemes? How to invest in Mutual Fund Direct Plans online?)

The main benefits of investing in a balanced fund are;

  • Diversification : The funds are invested in both equity and debt financial securities leading to diversification of investments.
  • Asset Allocation & Re-balance : Balanced funds regularly re-balance the portfolio based on market conditions & asset allocation limits. An investor is, thus, saved the hassle of manually re-balancing the portfolio. But it is prudent not to remain invested in these funds till your reach your Financial Goal target year. You may have to switch to safer investment avenues as you reach your target year.
  • Low volatility : Balanced funds are less risky compared to pure Equity funds. Equity portion will provide the capital appreciation through stock prices appreciation and dividend income. Whereas, Debt portion can provide stability through interest income and appreciation in Bond prices.
  • Long Term Capital Gains : In terms of taxation, the balanced mutual funds that invest at least 65% in equity ((Equity oriented) attract no tax liability on Long Term Capital Gains. The units of these funds should be held for more than 12 months.
  • You can consider balanced funds for your medium to long-term goals like Retirement Planning or for Kid’s Higher Education goal planning.

Though Equity oriented Balanced funds have low risk profile compared to pure Equity funds, but it does not mean that they are totally risk-free. You may have to remain invested for longer period to get decent returns.

Do you invest in Balanced funds for your medium or long-term financial goals? Kindly share your views / comments.

(References : moneycontrol.com, valueresearchonline.com, morningstar.in & freefincal.com) (Image courtesy of Sira Anamwong at FreeDigitalPhotos.net) (Post Published on : 14-June-2016)

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Sreekanth Reddy

Sreekanth is the Man behind ReLakhs.com. He is an Independent Certified Financial Planner (CFP), engaged in blogging & property consultancy for the last 7 years through his firm ReLakhs Financial Services . He is not associated with any Financial product / service provider. The main aim of his blog is to "help investors take informed financial decisions.""Please note that the views given in this Blog/Comments Section/Forum are clarifications meant for reference and guidance of the readers to explore further on the topics/queries raised and take informed decisions. These should not be construed as investment advice or legal opinion."

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  • Dear shirkant,

    Please tell me where to Invest Rs. 10 lakh for future security of my retirement.
    I am 67 years old .

    Is it equity linked mutual fund or something else.
    Can I start now.

    • Dear Divakaran Ji,
      Are you totally dependent on the income generated by this Corpus?
      Do you have any other source of income to meet your living expense?
      Is this investment for wealth accumulation or for regular income withdrawals?

  • Dear Srikanth,Stock market is daily making high.New investment in equity mutual funds has become risky.It is high time if you rewrite one year old article on balanced mutual funds.Thanking you.

  • Hi Sree,

    First and foremost you are doing a fabulous job by assisting people to invest healthy. I learnt a lot from your blog. I also went through other sites which you suggested. I am very thankful to you.

    i invested in ELSS scheme,SBI Magnum tax gain, regular growth plan – 50 K(with nill knowledge, since Bank manager suggested).Later realised there are better schemes.

    later i went through your blog and other articles.
    My goal is to invest 1- 1.5 lakhs for period between 1.5 -3 years. Risk is moderate. Expecting returns >9%. I come under 20% tax slab.

    Here comes my query,Is investing in Debt Short term or Balanced Fund ideal? Not sure which fund to decide,i will definitely keep money more than one year.

    I believe in that case Balanced funds will give more returns after one year than short term debt funds. Is my understanding correct?

    I thought of the below:

    Balanced fund – HDFC Balanced fund

    Debt Short term – HDFC Short tem fund

    please suggest if there are any better funds than the above.

    Really appreciate your contribution to my plan

    Thanks,
    Bhavana

    • Dear Bhavana,
      Thank you for your kind words and appreciation!
      Let’s first understand the fact that returns from debt funds or equity oriented funds are not fixed/guarenteed.
      Equity balanced funds can give more returns or even less returns than a debt fund in one year.
      So, ideally you need to pick a category based on your investment objective and time-frame.
      You may consider a balanced fund if you have a longer / medium term view, say 5 years +.
      Read:
      What are Debt funds? Types of debt funds.
      Best Debt funds.
      What are Arbitrage funds?
      Best MIP Funds.
      Best equity funds.

    • Hi Sree,

      Thanks for your prompt reply. As I said I already gone through all your articles and other suggested sites. I feel like I have theoretical knowledge but not the practical knowledge. Since I have already suggested my risk level and time tenure, I would really appreciate if you suggest me the right fund type and best fund in that type. I really trust your suggestion.

      Kindly help!

      Regards,
      Bhavana

      • Dear Bhavana,
        If your time-frame is say around 5 years, you may pick HDFC Balanced fund or even on large cap fund like Birla frontline equity.
        If you have time frame of around 3 to 5 years, you may pick MIP Fund like Birla MIP II Wealth 25 fund.
        For short term – you may consider Short term debt funds or even Arbitrage funds.

        • Hi Sree,

          Thanks for your suggestion. I have a query which is nagging me. Here it is, this year due to Trump modifications in IT sector policies I assume there will be affect on Technology. I myself work in Infosys and knew there are steps taking in place to minimise the effect but impact is still there.
          So is investing in MF including Technology portfolio ideal for this year returns? If not please suggest MF with out Technology through your expertise.

          Thanks much in advance. You are helping me a great deal!!

          Regards,
          Bhavana

          • Dear Bhavana,
            Suggest you to kindly visit moneycontrol.com and check the latest Portfolios of the funds shortlisted, you may skip the ones which have high exposure to Tech/IT sector.
            For example : You can track the Portfolio details of HDFC Balanced fund here…

  • Hi Sreekanth,

    I am 25 years old. I am planning to invest in Low Risks Mutual Funds which can assure me a minimum of 9-10% every year. I can invest max 3000 INR per month, and for duration 10 years. Could you please suggest me best Mutual Funds for my requirement.

    Regards,
    Rohith

      • Hi Sreekanth,

        What i am thinking is, if i invest in low-risk mutual funds for long term, i am assuming that it works similar to PPF. Since PPF interest is 7.9%, is bit low for long term.
        Atleast i need 9-10% interest, so falling on Mutual Funds to get it..!

        If not this..! Please suggest me one good mutual fund for long term (10 years).

        • Dear Rohith,
          Nothing wrong in expecting lower return/taking lower risk, provided you are confident that you can achieve the required goal amount (if any) with that kind of return.
          “‘The biggest risk is not taking any risk… In a world that changing really quickly, the only strategy that is guaranteed to fail is not taking risks.’”

          You may consider one Large cap fund and one Equity oriented balanced fund.
          Read: Best Equity funds.

  • I have two daughters of 7 and 4 years, iam having a annual income of Rs 5 L , i am 33 yrs, at present i am investing in Kotak select focus fund Rs 6000/m, and planning to invest in HDFC balanced fund Rs 4000/m from next month onwards. For tax i have sufficient cover by lic policy, pf contribution

    I need a corpus of Rs 50 L for my daughters studies/marriage.

    Will the investment in MF be adequate

  • Hai, I am 28 Years Old, i am recently starting SIP following Funds:

    1) Axix LT Equty Fund Growth – 1000 (Present Hold Value 4ooo)
    2) HDFC Mid-Cap Opportunities Fund Growth – 1000 (Present Hold Value 4000)
    3) ICICI Prudential Value Discovery Fund Growth – 1000 (Present Hold Value 6000)
    4) Birla Sun Life MIP II – Wealth 25 Plan – Growth – 1000(Present Hold Value 1000)

    I was planning to have one more investment in Lumsum (25000/-) of Balanced Fund in BNP Paribas Balanced Fund.
    My investments horizon is long of apx 20 – 25 years. this Balanced Fund is Ok are any changes in Fund

    • Dear Chiranjeevi,
      Your portfolio looks fine.
      Is BNP Balanced fund a New Fund offer? If so, you may pick a balanced fund from the existing schemes rather than investing in a new fund.

  • Hi Srikanth,
    I am an NRI. If I need to withdraw Rs. 30000/- per month thru SWP, how much amount I should invest. looking for Capital appreciation also. Which fund I can opt?

  • Dear Sir, I am a new investor in MF and investing lump sum in Balanced funds (SBI magnum, HDFC balanced fund) with SWP option. I am looking for good long term tax free return with less risk ( below avg).
    Can you please suggest me a way to invest small amount of money which accumulates time to time in my savings account from several FD and ECS. I am not looking for SIP as this is not regular accumulation. I do not want to keep this amount idle in savings account. Is there any investment option in mutual fund so that I can keep toping up with such small amounts time to time in a less risk/moderate risk fund and get tax free return with SWP.
    Thanks in advance.

  • Hi Sreekanth,
    One my friend is planning to invest in mutual funsd who is staying currently in U.S.Is he allowed to invest in MF as an U.S NRI?If yes,which AMCs are allowed.

  • Hi Sreekanth,

    I am 30 years old & recently started doing SIP in following Funds:

    1) HDFC mid cap – 5000
    2) ICICI ELSS – 5000
    3) SBI Midcap (which actually is small cap) – 5000

    I was planning to have one more sip of apx Rs 5000. I am confused between Balanced, Large or Multi cap.
    I did some research and found that in long run Balanced funds beats large cap & almost same returns for multi cap. Do you suggest i should go for Balanced instead of large or multi cap as it give little safety for downside performance of market as well.
    My investments horizon is long of apx 15 – 20 years.

    Regards,
    Shruti

    • Dear Shruti,
      Your current portfolio has mid/small & multi cap (though it is an ELSS fund). so, it makes sense to add an equity oriented balanced fund to the portfolio.
      But do note that past performance may or may not be repeated in the future 🙂

  • Dear Srikanth,

    Thank you for educating MFs online. I am 36 years old. I am writing my portfolio for retirement plan( retirement at 60yrs) : tata retirement savings fund moderate(D) -2000/-, SBI magnum balanced (D)-2000/-, ICICI prudential balanced(D)-1000/-, PPF SBI -1000(15 yrs),NPS ICICI bank -4000/-

    Kindly look into them and advice me.

  • Dear Sreekanth,

    Is it better to invest in HDFC Balance Fund lumpsum or do you recommend going the SIP route in Balanced fund ? Can you please tell which method is better and why?

    Sreekumar

      • Dear Sreekanth, thanks for your reply. My investment timeframe for equity focussed balanced fund is 5-6 years. Is that OK ? I have a plan to go for aggressive MIP also for around 3 years. Kindly advice whether its good to go via lumpsum or SIP for both? Also 1 more doubt, when is best time to invest in MIP and balanced fund, when markets down or up? Also better to go lumpsum or SIP? Thanks in advance bro!

        Sree

        • Dear Sreekumar,
          Obviously when markets are down, but it is next to impossible to TIME the markets.
          The next few months can give you good opportunity to make your investments. Suggest you to invest lump sum amounts in few installments over the next say 2 to 3 months.
          Read : Best MIP Funds.

  • Dear Srikanth,

    I am Shridhar. I am 25 yrs old.. I can invest 2000 pm. But dono where to invest ( MF or Shares or Equity or Debt). I am clueless ans completely new to this. Please help me or advise me, on what basis i can go.. Possible please drop a mail to me or provide me your call no.. I will reach out to you.

    Thanks,
    Shridhar K.S
    9066339794

  • Dear Sreekanth,
    I am 47 year old NRI, a regular reader of your blog and taken your suggestion many times. I have been investing in the following SIPs since 3 months with an additional investment of 1 lakh each on every fund:
    • Birla Sunlife Frontline Equity (Regular Growth) – 10000
    • Tata Balanced Fund (Regular Growth) – 10000
    • ICICI Pru Value Discovery (Regular Growth) – 15000
    • UTI Midcap Fund (Regular Growth) – 15000
    I wish to invest 25lakhs in MF to get regular income after 3 years through SWP. Please suggest if I should invest in Tata Balanced fund I am already holding or invest in a new fund?
    Regards,
    Kumar

    • Dear KUMAR,
      If I understand you correctly, you would like to invest Rs 25 Lakh one-time for 3 years for accumulation and then set up SWPs after 3 year to receive regular income. Am i right?

      If so, instead of balanced fund, you may consider MIP fund like Birla MIP II Wealth 25 plan (growth option) for next 2 to 3 years and then set up SWP with the same fund.

      Kindly read: Best MIP Mutual Funds.

  • I am 62 years male retired from Central Govt. I am in 20% tax bracket. I have kept my retirement corpus in Banks. After paying tax nothing much is left.

    I intend to make investments in mutual funds or otherwise which are moderately safe.

    So far I have invested in Axis Long Term Equity for the purpose of tax saving. And I have also invested in Tata Balanced Fund (Monthly Dividend Option).

    Kindly advise me how to get maximum returns, safely (moderately) from my corpus.

    Thanks

    P K Batra

  • Sreekanthji,
    I have started SIP in reliance equity opportunities from 3 yrs. It was performing good at that time. But last year it has given mere 3% return year to year. What should I do? Some websites suggest to swicth to another scheme. What is the best way in this situation? Or should I continue some time?

  • Dear Mr. Sreekanth,

    I am a retired person recently (58 yrs. – not a Sr. Citizen) from a Private company. I have invested from my retirement benefit some amount in SCSS and MIS for safe side and regular quarterly/monthly income. I have some 10 lacs rupees which I will be requiring after 5 years only, I want to invest in Mutual Fund for 5 years duration. I am in 10% tax bracket. Can you please tell me if I can invest in PPF for tax saving (as my PPF account is still in active on extended five years) or I can invest in ELSS. If so, please suggest me one or two best funds name. Also 4 to 5 Mututal Funds name where I can invest my money for safe and better returns as the bank FD rates are very low I do not want to invest. Also please suggest me if I have to invest in lumpsum or in SIP/STP by investing the amount in Liquid Fund. If so please tell me one or two good liquid funds name.

    Thanks and regards

    H. R. Krishnan

    • Dear Krishnan Ji,
      But only an n individual of the Age of 60 years or more can open the Sr C.S.S account???
      How dependent are you on this corpus amount after 5 years? Can you afford to take risk on this investment?
      If yes, you may consider a Balanced fund + Aggressive MIP MF (growth) + PPF (for tax saving too) can be considered.
      Read:
      Best Balanced funds.
      Best MF MIP funds.

      • Dear Mr. Sreekanth,

        Thanks for your reply. Since I was retired under VRS and above 55 years, I was eligible for SCSS scheme. Can you please tell me in how many funds (one or two) I have to invest under Balanced and MIP Agressive Funds. Please also give me your fund names suggestion and the proportion of amount to invest. Also let me know if I have to invest in lumpsum or SIP being it is equity fund and how to invest? thru respective fund houses under direct plan or what?

        Regards

        H. R. Krishnan

        • Dear KRISHNAN Ji,
          You may consider investing a portion of your Corpus (say 40%) in MIP fund as lump sum investment.
          The remaining amount can be invested as STP, Ex – HDFC Liquid fund to HDFC Balanced fund.
          Kindly note that taxes on capital gains on Debt fund are applicable. STP is treated as normal redemption.
          Kindly read: MF Taxation rules.

          • Dear Mr. Sreekanth,

            Thanks for your reply. Can you please tell me is it better to invest thru individual MF House or any online portal (please sugget me the best one) or thru CAMS etc. I wish to invest in direct plan. Also please let me know is it better to open account in my single name and include my wife as nominee or to open in joint names.

            Regards

            H. R. Krihnan

            • Dear KRISHNAN Ji,
              You may consider investing directly through fudn house websites or portals like MF Utility or Invezta.
              Joint or individual – It is based on your requirements. Even if it is single, do register the NOMINEE name across all Folios.

  • Hi Sreekanth
    What would you advice ?

    HDFC balanced fund Direct vs Regular – I am new to this, will it matter if I go for a Direct plan for next 3 years ?
    What help will I get from distributor if I opt for a Regular plan ?

    Thanks

  • Dear Shreekanth,
    I want to invest a lump sum of 2lacs in a balanced fund for 3-5 yrs. HDFC Balanced and TATA Balanced have been leading the charts and favored by most but their Equity allocation is more Midcap oriented. I want to be extra safe with this and want to know your take on Franklin India Balanced fund and ICICI balanced Advantage fund(it’s equity allocation is showing below 60%…not sure if it is an equity or debt oriented hybrid fund). From the portfolios in valueresearch ICICI balanced Advantage seems to be the least risky in bear phases with lowest Standard Deviation. Kindly advice which fund should I choose.

  • Dear Sreekanth.,

    Its KK again., thanks for your continuous support in making us financially healthy.,

    I came across one question asked my Mr.Prem on 21st August in that he mentioned that HDFC balanced fund is investing majority in mid/small cap and with little exposure to large cap and in your reply you also acknowledged it.

    i verified the Fund fact sheet, Money control etc., but i could see the classification only to the extent of Equities & debt which is around 70% -30%.,

    As a matter of gaining knowledge pls let me know where do can i get such information.

    Regards

    krishna

  • Dear Shreekanth
    My time horizon is 8+ years and investing in Tata and HDFC balanced fund 4K each I checked overlap from the link given in your article in Fandoo it is 18%.Shall I continue?
    Holding one debt in Franklin india low duration 3k.
    ( selected both balanced fund from an article “My portfolio” by you)
    I am 48 now so didn’t invest in equity. I am holding these 3 funds only for kids education who are 11 and 13.
    Please share your thoughts and kindly advice.

  • Hi Sreekanth,

    I’m planning to invest 20k in 2 mutual funds for my long term goals.
    1. For my daugthers education-13 years time period= ICICI Prudential focused Bluechip eq fund-Growth-10K
    2.For her marriage- 20 years= HDFC balance fund or Tata balanced Fund(dierct plans)-10k

    Is it wise to invest in the above mentioned funds at present market rates? or shall I wait for the fall?
    Shall I invest 20k in 4 different funds instead of 2?

    pls suggest…

    Thanks,
    BR

  • I am trying to invest online for JM Financial (JM Core 11 Fund) and Principal (Emerging BlueChip equity Fund). However, the online options for both the fund is really a pain as either the site does not open up correctly or they have typical issues like Principal Online page does not have many states when selecting the address. It also cannot take overseas phone numbers for NRI investors.

    Has anybody tried the online options for these 2 AMCs?

    I am trying to use Funds India to avoid this problem, but they initially want to deposit Rs 25 K, even if I want to invest only a starting cost of Rs 5000 in each fund.

    • JM Fund House do not sell directly through their AMC. Hence, no Direct fund. You select select any Zero cost Brokers like MFIndia, Zerodha, etc. Principal online site is a pain, but since Principal Emerging Fund is good hence invested.

  • I want to start a sip of 10000 per month. Tenure 15-20 years. My age is 31. Please suggest some mutual fund options.

  • Dear SreeKanth,
    I have HDFC balanced fund, if I am not wrong its more of a mid/small cap balanced fund with little exposure to large cap. Now, I am also looking for another balanced fund that is covering more large cap, which one would you suggest?
    Thanks

    • Dear Prem,
      I agree that the fund’s equity portfolio has higher allocation towards mid- and small-cap than most other balanced funds.
      You may have a look at Franklin’s Balanced fund. The equity allocation is multi cap, with a diversified portfolio of large, mid- and small-cap stocks.

  • Dear Sreekanth,
    I have an investment in HDFC TOP 200 direct plan (not SIP) since Jan 2015. Do I need to continue this fund or switch to other now?

  • Hi Srikanth,
    I am planning to invest 15K PM via SIP and my time horizon is more than 15 years(goal is Childern marriage and Education) .Planning to invest in below funds .
    Please suggest about my below portfolio and let me know if any changes required .
    I have 1 Cr Term Insurance from HDFC and have Health insureance as well.

    1) Kotak Select Focus Fund – Regular (G) OR SBI BLUE CHIP FUND – 4000 -(Large Cap)
    2)HDFC Balanced Fund GROWTH -3500
    3)HDFC MidCap Oppertinuties Fund – Growth -4000(Mid Cap)
    4)DSP Blackrock Micro Cap Fund -Growth -3500(Small cap)

  • I have mid-cap SBI Magnum Global Fund which I took 3 months back and I regret having. The returns are the worst among the peers. I also have Large cap SBI Magnum Equity Fund which is doing fairly well. Do I switch from Global to Equity? If I not wrong I will get 15% tax on the capital gain and 1% penalty from the fund. Is this a wise decision or should I wait for Global Fund to perform better (wait till 1 year and exit without tax or penalty) ?

      • Hi Sreekanth,
        I know 3 months is pretty short, however, I was checking the history of this fund and it has been a low performer for 3 years. This is just one of the mid cap funds I have for my portfolio for retirement in next 15 years. The selection of this fund was literally due to accidental pick up of lumpsum allocation – was supposed to pick up Magnum Midcap but in the drop down selection, it accidentally was Global and didn’t even realized before confirmation 🙂

        Then I was observing this fund for 3 months and doing background checks and realized, I have selected the worst of the funds. I am not doing any SIP in this fund, it is just the one time lumpsum.

        So kindly state your opinion – stick with it and hope for the best OR take a bit of loss and pick up a good mid-cap / large cap (Magnum Equity, which I already have)

  • Hi,

    Very useful article. Can you advice on long term plan.

    Equity funds seems to be a good option. I heard from a friend that principal mutual funds offers some very good investment options (principalindia.com). Please suggest.

  • Dear Sir,

    I have been investing 2k amt in two mutual funds 1.5 years.

    1. Birla Sunlife Manufacturing Equity fund-Regular Plan-1000/-

    2. HDFC Small and Midcap Fund- Regular Plan-1000/-

    My investment time horizon is >5 years & above, kindly suggest me are above fund goods in their Catagory or should i selection another funds to gets best returns with low risk.

      • Dear Sir,

        Thanks for advice.

        I read read your articles & decided to stop my current SIP & going to new SIP’s. Schedule are below.

        1.DSP BLACK ROCK MICRO CAP FUND-DIRECT PLAN-2000/- per month.

        2.AXIS LONG TERM EQUITY FUND-DIRECT PLAN- 1000/- per month.

        I m still confuse between two fund category – Balance fund & Diversified Equity. Which should i obtained for long term purpose?

        I want to invest another 2000/- Rs. through SIP.My investment horizon is more than 4 years.

        Pls help & guide me & correct me if in case any deviation require.

        • Dear YASH,
          If you are investing for say >10 year period, you can surely consider one diversified equity fund. Ex- Franklin prima plus or ICICI Value discovery fund.
          For a period of say 5 years, you can consider a balanced fund. Ed- HDFC Balanced fund.

          • Dear Sir,

            Thanks for removing my confusion between Balance & Diversified Fund.

            What about my rest funds?- are they good or any changes require.

            1.DSP BLACK ROCK MICRO CAP FUND-DIRECT PLAN-2000/- per month.- Investment horizon is more than 30 years (for retirement planning)

            2.AXIS LONG TERM EQUITY FUND-DIRECT PLAN- 1000/- per month.- Investment Horizon is more than 15 year (for child education purpose)

            Thanks once again.

  • Hi Sree,

    I have redeeemd a mutual fund and want to reinvest in HDFC Balanced fund. I have already started a SIP in same. Can I make one time investment ? THe amount is around 4ok ? Please suggest.

  • Dear Mr. Sreekanth,

    Really i am always reading your blogs and investing as per your guidelines..Thank you very much for your blogs for us.

    I want to invest 4000-5000 pm upto 5-10 years for our child education .His age is 1 year.

    Can you suggest some good funds with fixed returns and below average risk ?

    I would appreciate for your prompt reply.

    Warm Regard

    Jitendra Sahoo

  • Dear Sir,
    I want to invest 5k per month in MF through SIP, i have read your articals and decided to invest in below funds.

    1.AXIS LONG TERM EQUITY FUND-DIRECT -1000/- per month for long term wealth creation (minimum 10 years).

    2.DSP BLACK ROCK MICRO CAP FUND-DIRECT PLAN -2500/- per month for Retirement planning (minimum 30 years).

    3.Franklin India Balance Fund-Direct Plan-1500/- per month for 3 to 5 years.

    I have been observing that MF Overlaping is very less in above funds.

    Pls advice or suggest me incase if any changes require or not.

      • Dear Sir,

        Thanks for your reply.

        After received your instruction, i have finally decided to create my MF portpholio which as follow.

        1.AXIS LONG TERM EQUITY FUND- DIRECT PLAN- 1000/- (for tax saving purpose & crating long term wealth)

        2.DSP BLACK ROCK MICRO CAP FUND-DIRECT PLAN -2500/- for long term purpose (Retirement Planning)

        3.HDFC BALANCE FUND-DIRECT PLAN- 1500/- for mid term wealth creation (3-5 years)

        4. FRANKLIN INDIA HIGH GROWTH COMPANIES PLAN-DIRECT PLAN-1000/- for more than 5 years investment horizon.

        Pls check from your point of view & also inform me, how much MF Overlapping available in above fund.

        Once again thanks, have nice day !!!!!!.

  • Dear Sreekant,

    I want to invest 3,000/- per month through SIP in small & midcap fund catagory for 30 years for my Retirement planning , i have been observing below 3 funds in this catagory.

    1. DSP BLACK ROCK MICRO CAP FUND
    2.FRANKLIN INDIA SMALLER COMPANY FUND
    3.MIRAE ASSET EMERGING BLUECHIP FUND

    I m so much confuse to select best funds from above list which will provide me good return with low risk.

    Pls suggest me.

    Thanks.

  • Hi Sree,

    Hope you had a good weekend !!

    I just want to be doubly sure before making a lump sum investment in
    1) HDFC Balanced Fund. ( minimum 5 years ) = 2 Lakhs

    And

    2) Birla Sunlife MIP 25. (Minimum 3 years) = 3 Lakhs

    In the current market what would be the best option.

    – in one go
    – space out the amount in 4 instalments of 50k per week.
    – STP
    – or anything else you would advise.

    Thanks for always being helpful.

    Kindest regards.

    • Dear Ksam,
      Weekly installmennts may not really serve the purpose if you would like to avg it out (NAV).
      You may consider monthly lump sum installments or may be when markets falls on any given day.
      MIP – lump sum should not be an issue.
      Balanced fund – As suggested above or STP. (Ex – HDFC Liquid fund to HDFC Balanced fund)

  • Dear Sir, I am holding Kotak MF select focus fund Equity (G) since June 2014. Will it be right to redeem it now?

    When to redeeem a MF 9 in general) market up or down ? please advice

  • Dear Sreekant,

    I want to invest in MF worth Rs.1500/- per month in Balance Fund for 5 to 7 years, Pls suggest me which fund would provide best return?

    HDFC BALANCE FUND OR FRANKLIN INDIA BALANCE FUND.

  • Hi Sree,

    I am having Home loan from HDFC bank for 20 years whose EMI amt is 12,000/k per month. I will have to pay 28,80,000 (12,000* 240) till end the loan while loan sanctioned to me 12 Lakhs.

    Can you suggest me which MF should i obtain (through SIP) with which amt so that i can complete the loan within 10 years.?

      • Dear Sree,

        Currently my age is 35 years, since i m single hence i have not decided any retirement planing yet.
        my main target is to close my loan very soon & want to save 10 Lakhs amt till the age of 55 years then i will think about my financial planning.

        there are 2 mutual funds running in my portpolio.
        1.Birla Sun Life Manufacturing Equity Fund-REGULAR Growth-1000/- per month
        2.HDFC Equity Fund – Growth-500/- month.

        I m earning 25k per month.

        Pls suggest for best fund & advice for retirement.

  • Hi Sri,

    I want to invest some lump sum amount. Is it ok for invest 3 years in HDFC balanced fund?

  • Hi Sri,

    I am invested in HDFC Prudence Fund from Past 5 Years in SIP mode. I want to switch to HDFC Balance Fund. Is it advisable? Please suggest.

  • Shreekanth , i am regularly read your newsletter on my email, its really help me to increase my investment knowledge. Thanx for valuable knowledge.
    I am employee if PSU, i want to invest in tax saving mutual fund , i required 48000 rs invest to save my tax ,which are best option for it.please suggest me.

  • Dear sir
    this is not a comment but a question.there is no provision in income tax return form to show tax free retirement benefits( contributory provident fund final payout,leave encashment and gratuity) Should they be shown or not? If yes,where?

  • Hi Sreekanth,

    Superb blog. Very helpful and provides incredible and clear insight into investing.

    My wife and I are looking for long term SIP equity funds for retirement and children’s education and marriage. Our investment horizons are: 1) 18 years for the first investment type (education) and 2) 25 to 30 years for the second type (marriage).

    Could you please suggest some funds that you feel would be apt for this. I would not mind making a bouquet in each one.

    Many thanks in advance.

    Regards,

    Das

  • Dear Mr. Sreekanth,

    I have retired (58 yrs.) from a private organisation and I will be getting around 30 lakhs. Since bank interest are already very low and it will go further down I request you to suggest some good investment avenue where I can get some decent return and safety of capital. I will be requiring at least Rs.10,000- p.m. to carry on my monthly expenses and the rest can be invested for 5 years time.

    Thanks and regards

    H. R. Krishnan

  • Hi sreekanth
    Can u suggest me how to switch out from mutual fund from fund house website? How to switch from axis long term equity to Franklin tax shield from axis web site?

  • Dear Sreekanth,

    Greetings and good wishes.

    I have an investment of around Rs. 1.5 lakhs (invested through SIPs) in Birla Sun Life Dynamic Bond Fund – Retail Plan (G). However, I observed that this fund is seriously underperforming. Hence, I have paused the SIPs from this month.

    Please suggest whether I should continue to hold this fund or is it better to switch to some other fund; suggest a suitable alternate fund (s) to switch to.

    Regards,

    Sybecha

  • Dear Reddy,

    I am very much happy to visit your website… Here are very useful things, i just really enjoyed to read.. Thank u very much.. Intimate me, if u get any chance to visit tamilnadu. Great Day…

  • Hi Sri,
    I am 25 years old. I am earning 57k per month.I went through your various post. After which, I have decided to invest in below mutual funds. My short term goal – 1-2 years for marriage, Medium term 4 years for home and long term goal 10-15 years for child education. Could you please suggest if any of the below funds needs to be changed. I have to invest 5k per month. Also, I am confused between couple of mutual funds. Please help me out here

    HDFC Balanced Fund/TATA Balanced fund
    Axis Bank long term
    UTI Midcap Fund /Franklin India Samller companies fund/BNP Paribas Midcap Fund/Franklin India Prima Fund – Direct Plan

    • Dear Shivam,
      For a short term goal, kindly do not invest in equity oriented schemes.
      Medium term – HDFC Balanced fund.
      Long term goal – Axis LTE (if tax saving is also your requirement) + Franklin Smaller companies fund can be considered.

      • Can you please suggest something for short term goal as well. One of my target is tax savings also, so is there any other scheme for that as well apart from AXIS LTE (I will be investing in this)

        Thank you for prompt reply.

  • Dear Sree,

    I want to invest 5000 pm from my mom and looking for a conservative portfolio . Can you guide me on the same. Time horizon is 4-5 years.

    Thanking in advance.

  • Dear Sree,

    You have highlighted & discussed only equity oriented balance funds. I expect your commentary on debt oriented
    balanced funds. As I am interested in the same also if possible what will be tax implication respect of this debt oriented
    balanced funds?
    I am intending to go for Reliance reg savings balance funds Direct -qrtly dividend option plan ? how is it?

    Thanks

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