5 things an investor should know about Balance mutual fund.

Balanced funds are also known as hybrid mutual funds as the corpus of these funds are invested in both equities and bonds. This factor helps the investor to gain good returns on their investments along with moderate risk.

Below are some of the factors which an investor should know about balance funds:

  • Balanced funds normally invest at least 65% of their corpus in equity and rest in debt.


  • Balanced funds are treated as equity oriented funds for purposes of income tax, and offer a better post tax return then combines equity and debt funds in the same proportion.


  • Equity allocation provides long term growth and the debt exposure helps to reduce the risk level associated with the investment.


  • The fund manager manages the allocation of funds in equity and debt in a dynamic manner and so that the investor does not need to keep track of the asset allocation of the fund and does not have to carry out the rebalancing at his end.


  • Rebalancing happens without any tax implication to the investor who would have otherwise paid tax if he managed the asset allocation himself through different funds.

Here are some of the best Balance mutual fund schemes in which you can opt to invest your funds.

  • L&T India Prudence Fund.
  • ICICI Pru Balance Advantage Fund.
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