| Balanced Mutual Funds are a special type of | | | | the risk of investment in a capital market. |
| mutual fund that invest in both equity and debt | | | | The flip side is that incase of rising equity market |
| instruments. The advantages and disadvantages | | | | it is unable to get maximum returns due to its low |
| of such funds are discussed. | | | | percentage of equity allocation. |
| A balanced mutual fund invests about 45 percent | | | | This fund is good for people with low risk profile. |
| to 55 percent in equities and rest in fixed income | | | | This fund is good for people into a higher age |
| securities. They have a equal proportion of debt | | | | bracket. It is good for people who is saving |
| and equity. In case of a falling equity market, the | | | | money to meet a near term goal. It is not |
| debt component gives much higher returns and | | | | recommended for people who wants to get a |
| compensates for the loss suffered by the equity | | | | high equity exposure. For them pure equity |
| component. In case of a rising equity market and | | | | schemes can be suggested. Careful investors who |
| falling bond prices, the equity component | | | | want to get exposure to a substantial amount of |
| compensates for the same. | | | | equity and also wants to protect their capital on |
| The advantages of this type of mutual fund is | | | | the other hand can opt for this sort of scheme. |
| that it gives moderate returns but it assures the | | | | Thus balanced fund is a good fund that provides |
| safety of capital to a large extent. | | | | moderate risk, capital protection alongside with a |
| The advantages of this fund is that it minimizes | | | | percentage of equity exposure also. |