MUTUAL FUNDS & SIPBalanced Funds
A balanced fund is a mutual fund that contains a stock component, a bond component, and sometimes a money market component in a single portfolio. Generally, these funds stick to a relatively fixed mix of stocks and bonds. ... This leads to the name "balanced fund."
Who should Invest in Balanced Funds?
These funds are mostly meant for those who seek safety, income and medium capital appreciation from their investment. Those with low-risk appetite can invest in these hybrid funds to balance out the benefits and risks of the investment market.
Usually, equity funds follow variable asset allocation rules based on market conditions. But the advantage with hybrid funds is that they strictly adhere to their line of orientation. They never exceed the 65% limit as mandated by the investment guidelines.
That is why, during bull run of market, these top balanced funds generate higher returns from its equity component. Again, during the bear run, the erosion of fund returns is also prevented due to its debt component.
