Balanced Fund
Balanced fund is a type of investment fund for catering Mutual fund investors who prefer to have a mix of both Equity and Debt funds. This will help them to invest in both High Risk and Low Risk asset classes by balancing their investment funds.
As you are aware that Mutual Funds invest the money generated from the public in various stocks. The selection of stocks is aligned with the objective of the mutual fund. The objective is mentioned in the offer document. The objective varies from fund to fund differing from each other in the magnitude of volatility or in common terms, the risk associated in the stocks.
One such fund is the Balanced Fund. As the name suggests, all the elements that are associated with mutual funds are in a balanced proportion. So, balanced funds provide capital protection as well as capital appreciation. The ratio or amounts that is invested in each asset class (equity, debt, bills, etc) are usually set an upper as well as lower limit.
Benefits of Balanced Funds
- Balanced Funds are an easy solution for conservative investors
- It has the inherent advantages of both equity and debt funds.
- There is a scope for higher returns from equity stocks and also there is safety with the exposure in debt instruments.
- The returns are less volatile
- It is quite suitable for investing for the long term.
- It enables to derive the maximum out of one’s investment by taking little risk.
