What are the benefits?

If you have not yet put your money in stocks either directly or through equity mutual funds, it would be worthwhile to explore this highly rewarding asset class. However, there are another, much safer, yet paying, alternative—balanced funds.

This category of mutual funds invests in both fixed income instruments and equity to strike a balance between risk and return.

Usually, such funds invest at least 65 per cent of the corpus in equity, while the balance is in debt.

The allocation to equity and debt may vary across funds depending on the prevailing market factors.

For instance, if the fund manager believes that the outlook for the equity markets is bright, he may allocate more resources to it. Otherwise, he may keep the exposure to it to a bare minimum. The onus is on the fund manager, not the investor, to decide on the optimum mix of assets.

Less Risky & volatile

In addition, since balanced funds do not invest all the money in equity, they are less risky and volatile than pure equity funds.

This conservative approach helps balanced funds deliver steady returns to investors across market cycles.

Those who get easily discouraged by market volatility, yet want a flavor of equity in their portfolio, should consider a balanced fund.

From India, Ahmadabad
Yes - Balanced funds are good however seeking help from an unbiased financial expert wont do any harm. I have a good experience with Birla Sun Life ‘95 Fund and the mutual fund adviser seems quite experience with his stuff; hence investing my money was reliable and safe.

From India, Bombay
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