Balanced funds see inflows while other equity products see outflows

MUMBAI: Balanced funds have seen net inflows for the fourth consecutive month in February, say the recent data release by Association of Mutual Funds in India. In February, balanced funds saw net inflows of Rs 135 crore and the year to date inflows stood at Rs 109 crore. Equity funds and ELSS funds, however, have been experiencing net outflows of Rs 13,445 crore and Rs 1,909 crore respectively in the current financial year.

In last five years equity markets have been volatile. Investors in equity funds are opting for redemption as they see the fund's NAV reaching the level at the time of their investments.

"However hybrid funds such as balanced funds are the preferred bets by the customers now. On the one hand it offers exposure to equity and on the other it limits the downside by investing in fixed income instruments, that may benefit as interest rates are expected to fall," says Anup Bhaiya, managing director, Money Honey Financial Services. He advises investors with minimum 24 months timeframe to invest in balanced funds.

HDFC Balanced Fund and HDFC Prudence Fund are two five star rated funds by Value Research, a mutual fund tracking entity. These funds have given 12.68% and 12.38% returns respectively in last five years.