Risk is the main quotient in Investment World. A favorable risk-reward balance attracts most of the investment from the public. As investing in large cap, Midcap, small cap, multi-cap has different degrees of risk involved in it, people tend to give a second thought before investing. Investing in Balanced funds reduces the risk of downside to the fund to some extent as it has a good composition of Fixed income securities and equity. The fund’s ability to give handsome returns in long term is most suitable for a risk-averse investor. Let us look at the best balanced mutual funds in 2017 to invest in.
Best Balanced Mutual Fund in India to invest in 2017
- ICICI Prudential Balanced Fund
- HDFC Balanced Fund
- DSP-BR Balanced Fund
Reliance-RSF Balanced Fund
L&T India Prudence Fund
Franklin India Balanced Fund
SBI Magnum Balanced Fund
HDFC Prudence Fund
- UTI Balanced Fund
- TATA Balanced Fund
Comparison Of Funds**
Details of Funds
ICICI Prudential Balanced Fund
This fund has classified itself as a top performer in the category by delivering an exceptional return in long term. It has outperformed its index by a big gap of 8-11 percentage points. The fund invests in equities and related securities as well as fixed-income and money market securities. The approximate allocation to equity is in the range of 60-80 percent with a minimum of 51 percent, and the approximate debt allocation is 40-49 percent, with a minimum of 20 percent.
The fund has invested 30% in debt securities, provides risk-averse investors a cushion against volatility. The fund has invested around 11.26% (as on 28th Feb)of its asset in Government Securities. In equity space, the fund has most exposure in Financial (14.91%), Energy(12.84%), and Technology (8.64%).
HDFC Balanced Fund
The fund invests with current income from a combined portfolio of equity and debt instruments. The exposure in equity related securities is around 60% and balance in debt funds. A consistent out-performer in long term in its category has even given better returns than in high-risk pure equity funds like HDFC equity and HDFC Top 200 funds.
The fund has higher midcap and small cap allocation to the portfolio than peers. The management invests in stocks with potential growth, management quality, ROE with correct valuations. The Funds exposure in debt is at 31% and 17% (as on 28th Feb) of the total asset is invested in long-term Government securities. Since inception, the fund’s return has been around 16%.
DSP BlackRock Balanced Fund
The fund’s objective is long-term capital appreciation and current income from a portfolio constituted of equity and equity related securities as well as fixed-income securities. Over 1 yr, 3 yr and 5 yr the fund has given a return of 23.42%, 20.68%, and 14.89% respectively beating its index by 6-10 percentage points. The fund’s equity exposure is 73%. Debt at 20% and cash and cash equivalent at around 6%. The fund invests across market capitalisation and has 7% of its asset in GOI securities.
Reliance Regular Savings Fund – Balanced Option
Launched in June 2005, the fund has grown on the back of strong performance over the last 10 years. The fund’s AUM is at Rs.4716 crore and given a twice the rate of return against its benchmark.
The fund invests a major portion in equity and a small portion in debt and money market instruments. It will invest up to 50 percent of its assets in equities and equity-related securities and at least 25 percent of its assets in debt and money market instruments with an average maturity of 1 to 7 years.The fund has exposure of 66% in equity and 32% in debt mainly in corporate debt instruments.
L&T India Prudence Fund
A blend of value and growth style of investing the fund has shown solid performance in a short span of time. The fund invests 65-75% of its asset in equity mainly in mid cap and small cap. The debt portion is a mix of sovereign debt and treasury investment. Launched in January 2011, The fund has given a return of 18.13% over last 5yrs and from the chart below, we can check the strong performance of the fund.
The fund aims for the stability of investment and current income from a balanced portfolio of high-quality equity and fixed income securities. The fund resilience to volatility has helped it to be a consistent performer in the segment. The fund allocates in the ratio of 65-35 to equity and debt. The equity allocation is diversified and debt is a mix of long-duration gilts and corporate bonds. The fund is suited best for risk-averse investors.
SBI Magnum Balanced Fund
A top rated fund in the segment invests in a balanced portfolio of equity and debt securities. Earlier the fund was known as SBI Magnum Open-end. Invest in a 75-25 ratio of equity and debt. The fund’s equity mix is 50% large cap (Top 100 market cap) and rest in mid and small cap securities. It invests in defensive and cyclical stocks. Return to the fund since inception is 16.2%. The fund’s top 3 holding is in banking companies with HDFC Bank (5.75%), SBI (5.12%) and Kotak Mahindra Bank (4.49%) of its asset.
HDFC Prudence Fund
The fund has been launched in Feb 1994. Its AUM is at Rs 17775.8 crore and has given a total return of 19.17% since inception. The fund has given good returns in long term time period and the risk proportion is also high compared to its peer in the segment.
The fund follows a 75-25 equation in investing in equity and debt. It has invested 11% of its asset in sovereign bond. Over 1yr,3yr, and 5yr the fund has delivered 10-12 percentage points of more return than its benchmark. investing in quality cyclical and mid-cap stocks has aided in an increase of return.
UTI Balanced Fund
An open-ended balanced fund investing between 40% to 75% in equity/equity related securities and the balance in debt (fixed income securities) with a view to generate regular income together with capital appreciation. The fund has given a steady return in long term. It has given investor a steady return over long run and has outperformed its index by 5 -10 points in last 3 years.
Tata Balanced Fund
The scheme seeks steady returns from debt along with growth from equities instruments. The likely equity to debt investment ratio is 70 to 30. Earlier known as Tata Equity Growth Fund, Tata Twin Balanced has been merged into this fund. The fund is a safer bet in volatile market condition. It has given consistent superior return year after year. Its 5 yr and 10 yr return is 17.65% and 14.7% which way higher than the benchmark. The fund maintains 75% of its asset in stock invested in the large cap and mid cap and debt portfolio has mainly G-Sec invested.
The list of funds has been arrived after comparing different funds in the same category. Those funds with long term consistent good returns and had outperformed their benchmark index with gap up of percentage points have been considered.
-This blog post should not be constituted as an advice and investors are requested to do their own due diligence before investing into any of the above-mentioned funds. You can also try out Bodhik to get the funds best suited to your profile
** – All the numbers are as of writing of this post i.e 30th March 2017.