Balance fund is one of the best options to invest in mutual funds. They give returns higher than bank FD and lower than equity. It protects your capital from market risk. It is a mix of equity and debt. In balance fund, asset allocation is 65% debt and 35% equity. So you can enjoy the benefits of low risk and high returns of the equity in a single scheme.
balance fund keeps a balance between risk and rewards as it invests in both debt and equity. Asset allocation ratio depends on the theme of the fund, but its typically 65% debt and 35% equity. These funds are less risky and generate moderate returns. One can expect around 12% returns in balance fund schemes.
Best Balance Fund to Invest in India
HDFC balance fund
This is one of the best balance funds. Its 5 stars rated fund having very good past performance record. Its expense ratio is also low. The fund invests into large-cap and mid-cap stocks.
ICICI Prudential Balance Fund
Its a 4 stars rated fund. It has given good returns in the past. equity allocation is around 70% and remaining 30% is in debt schemes. The expense ratio is low and managed by an experienced fund manager.
L & T India Prudent Fund
It is a new and upcoming fund which is giving consistently good returns. It has given 17.98% returns since inception. The risk is moderately high in this fund.
Reliance Regular Saving Fund – Balance Option
This is a plan for the person who wants to do regular savings and earn good returns on his savings. Initial amount for this fund is as low as Rs. 500 and monthly SIP amount is Rs. 100.
Aditya Birla Sunlife Balance Fund 95
This is one of the oldest funds since 1995. has a good return track record. The only negative point here is the expense ratio. It is very high at 2.24%
which is a way high as compare to other funds.
Here is the comparative chart for the best balance funds.
Conclusion
Balanced funds are becoming popular as it’s a best alternative investment option for fix deposit. It’s a mix of risk and reward.
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The scheme invests in equities and related securities as well as fixed income and money market securities. It invests 60% minimum in equity and balance in debt related instruments.