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A lot of first-time investors end up investing in funds that are either too risky or low-yield. This is often done in an attempt to diversify the portfolio. However, if you were offered the benefits of both risk mitigation and high returns through a single fund, would you accept it? If yes, then start investing in balanced funds!<\/p>\n\n\n\n
As the name suggests, balanced or hybrid funds are those funds that offer equal exposure to the debt and equity market as their assets are invested in both to form a single portfolio. As a one-stop investment option, these funds allow you to enjoy the best of both markets \u2013 the low risk of debt instruments and high capital appreciation of equity funds.<\/p>\n\n\n\n
The following are the top features of balanced funds \u2013<\/p>\n\n\n\n
The equity market is highly volatile, and in extreme situations, the risk can exceed your endurance capacity. Since a part of the fund\u2019s assets are invested in stable instruments like debt and other money market instruments, you can easily mitigate the risk involved.<\/p>\n\n\n\n
If you\u2019re an investor with a moderate risk profile, you would surely not prefer receiving fixed returns from solely debt funds even though they are stable and safe. Since balanced mutual funds invest a portion of their assets in the equity market as well, you can enjoy higher returns and low-risk levels simultaneously.<\/p>\n\n\n\n
The dual investment nature of balanced funds, with the equity component offering better returns, and the debt component, stable returns, you stay well-protected from market inflation.<\/p>\n\n\n\n
If you need a fusion of safety and income and are comfortable with moderate capital appreciation, balanced funds are an ideal investment option. Moreover, if you are a retired individual who wants to invest in growth-oriented yet low-risk funds, you should consider investing in balanced funds.<\/p>\n\n\n\n
Additional Read: <\/strong>Should You Invest in Balanced Advantage Fund Now?<\/a><\/p>\n\n\n\n Hybrid or balanced funds are of two types –<\/p>\n\n\n\n These mutual funds<\/a> invest at least 65% of their assets in the equity market. The remaining assets are invested in debt or other money market instruments to overcome volatile market conditions.<\/p>\n\n\n\n These funds invest at least 65% of their corpus in debt market instruments such as debentures, bonds, government securities, etc. The rest is invested in equity funds or even cash or cash equivalents for higher liquidity.<\/p>\n\n\n\n Additional Read: <\/strong>4 Ws of Balanced Advantage Funds<\/a><\/p>\n\n\n\n You can compare between the most lucrative balanced funds options right where you are! Install Tata Capital\u2019s Moneyfy app<\/a> and make smart investment choices. Know each fund in detail and assess which ones match your risk profile, investment goals, and other requirements. Invest a lump sum into your future or build a healthy corpus steadily, in instalments with Systematic Investment Plans or SIP. Start your investment journey today!<\/p>\n\n\n\nTypes of balanced funds<\/strong><\/h2>\n\n\n\n
\u2022<\/strong> Equity-oriented balanced funds<\/strong><\/h3>\n\n\n\n
\u2022<\/strong> Debt-oriented balanced funds<\/strong><\/h3>\n\n\n\n
How to invest in balanced funds<\/strong><\/h3>\n\n\n\n