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​Why invest in balanced funds

Most times making a choice between debt and equity proves to be a difficult decision. To overcome this problem, most professionals’ advice that an investor should invest keeping their age & the current market conditions in mind.

However, if you are looking for diversification of your investment portfolio, that you can rebalance regularly, you can opt for hybrid or balanced funds. These funds give you the option of investing in a combination of debt and equity.

The main aim for these funds is to give an investor, the best of both worlds. But why one should invest in balanced funds, let’s evaluate a few points:

  • The primary advantage of balanced funds is to achieve diversification. The fund manager takes care of the asset allocation, as they rebalance the fund on the basis of need. These are the best for those investors who want to benefit from the stock market but don't have the heart for volatility. All sorts of investors should have some part of their investments in balanced funds.
  • The most necessary advantage of investment in a balanced fund is to make sure of a fascinating asset allocation, that is insulated from sudden euphoria or panic situations that usually investors are gene​​​​rally susceptible to. Balanced funds have evidenced their worth time and again and rewarded investors with decent returns and stability. The returns might not be as flashy as diversified equity funds, however balanced funds are the last word vehicle for long-run growth for conservative investors. They will prevent from jolty rides and guarantee a soft landing.
  • The other advantage is in terms of the risk-adjusted returns that a balance fund offers. There are instances of equity-oriented balanced funds outperforming, even equity funds, that is incredibly important, considering that an equity-oriented balanced fund can maintain 30-35% allocation to debt investments. There are often some explanations for that. One being that the fund manager is aggressive on the equity portion and includes a significant mid-cap and small-cap exposure. Also, it may be a measure of the stock choosing and portfolio management capabilities of the fund manager.

The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. Certain factual and statistical information (historical as well as projected) pertaining to Industry and markets have been obtained from independent third-party sources, which are deemed to be reliable. It may be noted that since NAM INDIA (Formerly known as Reliance Nippon Life Asset Management Limited) has not independently verified the accuracy or authenticity of such information or data, or for that matter the reasonableness of the assumptions upon which such data and information has been processed or arrived at; NAM INDIA (Formerly known as Reliance Nippon Life Asset Management Limited) does not in any manner assures the accuracy or authenticity of such data and information. Some of the statements & assertions contained in these materials may reflect NAM INDIA’s (Formerly known as Reliance Nippon Life Asset Management Limited)views or opinions, which in turn may have been formed on the basis of such data or information.

Before making any investments, the readers are advised to seek independent professional advice, verify the contents in order to arrive at an informed investment decision. None of the Sponsor, the Investment Manager, the Trustee, their respective directors, employees, affiliates or representatives shall be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.


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