Balanced mutual funds such as Tata Balanced Fund and L&T Prudence Fund are flavour of the season

MUMBAI: Balanced funds such as ICICI Prudential Balanced Advantage Fund, Tata Balanced Fund and L&T Prudence Fund, which make monthly dividend payments, have caught the attention of investors in recent times.

With investors putting more money into such schemes, these fund houses have garnered huge assets over the past one year. ICICI Prudential Balanced Advantage Fund, for instance, has seen its assets under management (AUM) surge by Rs 5,439 crore, while Tata Balanced Fund’s AUM has jumped by Rs 3,600 crore, and L&T India Prudence Fund’s by Rs 944 crore over the past year.

“ The regular monthly payout options, low volatility and attractive returns from these funds have attracted many investors who need a monthly cash flow,” said Anup Bhaiya, MD and CEO, Money Honey Financial Services.

“Balanced funds are suitable for the first-time equity and conservative investors to limit the effect of volatility,” said Nimesh Shah, MD and CEO, ICICI Prudential Mutual Fund. As per AMFI data, equity-oriented balanced funds have seen their AUM jump 70% to Rs 38,559 crore in November 2015 from Rs 22,769 crore a year ago.

Investors in the high-tax bracket gain as these funds are treated as equity funds from a taxation perspective and the debt component automatically becomes tax-free.