Article

4 Balanced Fund

05 Jul 2018 Jitender Singh

Balance funds invest in equity and debt instrument to follow a moderate approach. Generally, balanced funds invest 70-80% in equity and 20-30% in debt depending on the market condition and investment mandate. The main objective of balanced funds is to create wealth in long term by following a moderate approach.

These funds are less volatile than equity mutual funds since that invest 20-30% in debt securities. Thus, these funds are suitable for investors who are looking to create wealth in long term with comparatively less risk than equity mutual funds. Below are the some of the top 4 recommended balanced fund.

Scheme Name

AUM (Rs Cr)

1 Y (%)

3 Y (%)

5 Y (%)

Balanced Funds - Equity Oriented

Aditya Birla SL Balanced '95 Fund(G)

14,662

8.4

11.3

16.6

HDFC Balanced Fund(G)

21,779

10.8

12.1

19.0

ICICI Pru Equity & Debt Fund(G)

28,807

9.8

12.2

17.5

Reliance Equity Hybrid Fund(G)

13,426

12.8

12.2

17.0

1 year returns are absolute; 3 years and 5 year returns are CAGR.
AUM as of April 2018, Returns are as on May 11, 2018

1) Aditya Birla SL Balanced ’95 Fund

  • Aditya Birla SL Balanced ’95 Fund does a tactically allocates 50-75% to equities depending upon the market scenario.
  • The fund follow top down approach to select the sectors and bottom up approach for stock selection.
  • As on April 30, 2018, the fund had invested ~21% of its AUM in debt, ~51% in large-cap stocks and ~17% in mid-cap stocks.

2) HDFC Balanced Fund

  • HDFC Balanced Fund aims to maintain an effectively diversified portfolio across market capitalizations.
  • The fund invests in companies that enjoy leadership position in their industry with superior growth prospects and available at a reasonable price.
  • The fund manager actively manages the debt portfolio based on the interest rate outlook. Securities are selected after assessing credit, interest rate and liquidity risk.
  • As on April 30, 2018, the fund has invested ~28% of its AUM in debt instruments, ~46% in large-cap stocks, ~14% in mid-cap stocks and ~7% in small-cap stocks.

3) ICICI Pru Equity & Debt Fund (Erstwhile ICICI Pru Balanced Fund)

  • ICICI Pru Balanced Fund does a tactical allocation between debt and equity to ensure optimal risk reward.
  • The fund increases its exposure in debt market when the market is overvalued and increases its allocation to equity when market is undervalued.
  • As on April 30, 2018, the fund had invested ~26% of its AUM in debt, ~57% in large-cap stocks and ~6% in mid-cap stocks.

4) Reliance Equity Hybrid Fund (Erstwhile Reliance Reg Savings Fund-Balanced Option)

  • Reliance Reg Savings Fund-Balanced Option does a tactical allocation between debt and equity to generate superior risk adjusted returns.
  • To generate alpha the fund primarily invests in large-cap stocks with some tactical allocation to emerging leaders.
  • In debt securities, the fund follow accrual strategy and invest in high quality instruments with moderate duration
  • As of April 30, 2018, the fund had invested ~27% of its AUM in debt, ~58% in large-cap stocks and ~9% in mid-cap stocks.
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4 Balanced Fund

05 Jul 2018 Jitender Singh

Balance funds invest in equity and debt instrument to follow a moderate approach. Generally, balanced funds invest 70-80% in equity and 20-30% in debt depending on the market condition and investment mandate. The main objective of balanced funds is to create wealth in long term by following a moderate approach.

These funds are less volatile than equity mutual funds since that invest 20-30% in debt securities. Thus, these funds are suitable for investors who are looking to create wealth in long term with comparatively less risk than equity mutual funds. Below are the some of the top 4 recommended balanced fund.

Scheme Name

AUM (Rs Cr)

1 Y (%)

3 Y (%)

5 Y (%)

Balanced Funds - Equity Oriented

Aditya Birla SL Balanced '95 Fund(G)

14,662

8.4

11.3

16.6

HDFC Balanced Fund(G)

21,779

10.8

12.1

19.0

ICICI Pru Equity & Debt Fund(G)

28,807

9.8

12.2

17.5

Reliance Equity Hybrid Fund(G)

13,426

12.8

12.2

17.0

1 year returns are absolute; 3 years and 5 year returns are CAGR.
AUM as of April 2018, Returns are as on May 11, 2018

1) Aditya Birla SL Balanced ’95 Fund

  • Aditya Birla SL Balanced ’95 Fund does a tactically allocates 50-75% to equities depending upon the market scenario.
  • The fund follow top down approach to select the sectors and bottom up approach for stock selection.
  • As on April 30, 2018, the fund had invested ~21% of its AUM in debt, ~51% in large-cap stocks and ~17% in mid-cap stocks.

2) HDFC Balanced Fund

  • HDFC Balanced Fund aims to maintain an effectively diversified portfolio across market capitalizations.
  • The fund invests in companies that enjoy leadership position in their industry with superior growth prospects and available at a reasonable price.
  • The fund manager actively manages the debt portfolio based on the interest rate outlook. Securities are selected after assessing credit, interest rate and liquidity risk.
  • As on April 30, 2018, the fund has invested ~28% of its AUM in debt instruments, ~46% in large-cap stocks, ~14% in mid-cap stocks and ~7% in small-cap stocks.

3) ICICI Pru Equity & Debt Fund (Erstwhile ICICI Pru Balanced Fund)

  • ICICI Pru Balanced Fund does a tactical allocation between debt and equity to ensure optimal risk reward.
  • The fund increases its exposure in debt market when the market is overvalued and increases its allocation to equity when market is undervalued.
  • As on April 30, 2018, the fund had invested ~26% of its AUM in debt, ~57% in large-cap stocks and ~6% in mid-cap stocks.

4) Reliance Equity Hybrid Fund (Erstwhile Reliance Reg Savings Fund-Balanced Option)

  • Reliance Reg Savings Fund-Balanced Option does a tactical allocation between debt and equity to generate superior risk adjusted returns.
  • To generate alpha the fund primarily invests in large-cap stocks with some tactical allocation to emerging leaders.
  • In debt securities, the fund follow accrual strategy and invest in high quality instruments with moderate duration
  • As of April 30, 2018, the fund had invested ~27% of its AUM in debt, ~58% in large-cap stocks and ~9% in mid-cap stocks.
Research Disclaimer