Ask ET Mutual Funds: Should I invest in balanced or equity scheme?

I am investing in Axis Long Term Equity Fund and Axis Midcap Fund for the last five months. I want to invest Rs 1,000 more via an SIP. Please suggest which fund will be better: balanced or equity scheme? How long should I invest?

-- Binoy Mazumdar

Subhash Chawan, Managing Partner, Moat Wealth Advisors:

Equity makes sense only when you invest for the long term. That is, more than five years. You have not mentioned any goals in your question. I would urge you to think why are you investing this money. Since your age is not mentioned, I am assuming that you would be saving for your retirement which will require a good corpus. Starting early will give you the maximum returns with compounding your money.

Balanced Fund has more than 65 per cent equity. Since you have already investments in 100 per cent equity funds, including a midcap fund, you can choose a balanced fund to balance your portfolio. You can choose between Birla Balanced 95 Fund or HDFC Balanced Fund.



(If you have any mutual fund queries, message ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)