BEST BALANCED FUNDS TO INVEST IN 2018
MUTUAL FUNDS

BEST BALANCED FUNDS TO INVEST IN 2018

“Everyone require balanced life, whether it is for personal life or financial, even we expect that our portfolio should also be balanced in the same way. for this purpose, we consider balanced mutual fund”


How the Balanced Fund Work and why is it suitable for new investor?

Balanced funds is the composition of equity and debt portfolio where equity exposure is limited up to 75% and the rest will go in to debt structured portfolio, basically it is best suited to those who are conservative or first-time equity investor.

There was a time when these funds invested half the money in equities and half in debt. This changed after the 2006 Budget mandated that a fund has to invest at least 65% assets into stocks if it is to be treated as an equity fund. So, these funds now keep at least 65% money in equities. This is important as long-term gains (after one year) from equity funds are not taxed. Despite the high equity exposure, these funds have shielded investors better than pure equity funds when stock markets have been under pressure.

Your fund’s risk in this proposition of equities and debt will also be limited to equity part of the fund. But when the market is performing then the returns will be lower than the pure equity fund.

For instance, in 2008, balanced funds lost 42% value on an average, while equity diversified funds fell 53%. Again, in 2011, when equity markets tumbled, balanced funds lost 16% value, while the average fall registered by equity diversified funds was 23%. However, when markets rise, investors in balanced funds have to remain content with lower returns. So, in the rally of 2009 that followed the 2008 crash, balanced funds returned 60%, while equity diversified funds rose 82%.

So far, we have discussed why is it necessary to keep the balanced fund in our portfolio for first time or conservative equity investor.

“If we were to include the balanced fund then which are those 5 funds that we can include in our portfolio.”

BEST BALANCED FUNDS TO INVEST IN 2018

Hdfc Balanced Fund

Hdfc balanced fund is the best fund in balanced fund category, it is managed by expert Mr. Chirag Setalvad since April 2007.

It is the balanced fund where your money will get invested into equity and debt portfolio, in this fund equity will be allocated more than 66% and the rest will go into debt portfolio.

Its equity portion has mid-cap bias which means most of your money will be invested in stocks of medium-sized and small-sized companies. HDFC Balanced fund has 38.87% exposure to mid-sized companies.

Its debt portion has an allocation in corporate debentures and government securities. It currently holds close to 1% of its assets in cash and equivalents such as T-bills, banker’s acceptance and money market instruments.

If you are thinking of investing for a longer term, then this fund can prove to be effective for a goal such as

  • To collect money for children’s education
  • Save money for home down payment
  • Or to collect money for marriage

Fund insight & Performance: –

  • HDFC Balanced Fund has given a return of 16.96% since its launch date.
  • The Expense ratio is very low in its category of funds, which is only 1.95%.
  • Asset under management in this fund – 13,824 crores (as per 31st July 2017)

Hdfc Balanced Fund

source:-value research

Aditya Birla Sun Life Balanced ’95 Fund

The second fund which comes in our Top 5 is Aditya Birla Sun life Balanced 95. This fund is very old and consistent performer in its category.so far, the fund consistently has given more than 21% returns from its launch date. This fund has an allocation of more than 73% in equity and the rest it invests in debt structured portfolio, in equity it allocates more than 23% in banking and financial services.

Fund insight & Performance: –

  • Return since Launch: 21.23%
  • Expense: 2.26% (As on Jul 31, 2017)
  • Assets: Rs 10,148 crore (As on Jul 31, 2017)

Aditya Birla Sun Life Balanced '95 Fund

source:-value research

L&T India Prudence Fund

It is the new entrant in the balanced category but since launch, it has beaten the benchmark and peers with a good margin this has helped it earn a four-five-star rating consistently. The fund invests 65-75 percent of the portfolio in equities and the rest in debt. The equity portfolio is multi-cap, with higher allocations to mid- and small-cap stocks than those of peers. In the debt portion, the fund rarely takes credit risks and owns a mix of sovereign debt and treasury investments. The fund has maintained a higher mid- and small-cap tilt relative to the category in its equity portfolio, which has aided returns in this bull market.

Fund insight & Performance: –

  • Expense: 2.01% (As on Jul 31, 2017)
  • Return since Launch: 15.26%
  • Assets: Rs 5,846 crore (As on Jul 31, 2017)

L&T India Prudence Fund

source:-value research

ICICI Prudential Balanced Fund

A balanced scheme gives investors the best of both the worlds – equity and debt. Among the balanced schemes, icici prudential balanced fund has been a distinguished performer. 

On the equity side, the scheme is known for its contrarian investment strategy. This is a key thing that distinguishes the scheme from other balanced funds. The fund managers are not interested in employing inconsistent stock selection strategy and show superior returns. The scheme has a good mix of large-sized established companies on the equity side. On the debt side, the scheme’s portfolio consists of government securities and bonds with more than AA ratings, which provides reasonably good assurance to investors about the safety of their capital.

Fund insight & Performance: –

  • Expense: 2.25% (As on Jul 31, 2017)
  • Return since Launch: 15.02%
  • Assets: Rs 16,394 crore (As on Jul 31, 2017)

ICICI Prudential Balanced Fund

source:-value research

SBI Magnum Balanced Fund

SBI Magnum Balanced Fund is a fund which invests your money in both equity securities and debt securities. It has more than 73% exposure to equity and 25% exposure to debt, its equity portion has mid cap bias which means most of your money will be invested in stocks of medium-sized and small-sized companies.

This scheme has made a strong comeback with consistent performance since 2012. This has enabled a strong climb in the rankings, from two to five stars in the last three years. The fund has outpaced the benchmark and its peers and maintains a 75-25 equity-debt mix, fund invests in a mix of both defensive and cyclical.

In the debt portion, about half seems to be in G-secs, but the fund does take exposure to lower-rated corporate bonds (AA- and above) for higher accrual income, fund has kept ahead of both benchmark and peers over one, three and five years. Over three and five years, it has beaten its benchmark by 8-10 percentage points and peers by a healthy margin of about 5 percentage points. Its long track record suggests that this fund has been a big outperformer in bull markets but trailed in bear phases, with the NAV taking a sharp knock in 2008 and 2011.It’s an aggressive balanced fund meant for risk-takers.

Fund insight & Performance: –

  • Expense: 1.97% (As on Jul 31, 2017)
  • Return since Launch: 16.63%
  • Assets: Rs 13,487 crore (As on Jul 31, 2017)

SBI Magnum Balanced Fund

source:-value research

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