Advantages of investing in balanced mutual fund schemes

Balanced funds are mutual fund schemes that offer investment in both equity and debt securities. They can cater to a wide range of risk appetites and goals. Here’s how you can benefit from investing in balanced funds.

Regular income
Balanced funds can generate regular income for investors due to the debt component, which earns an interest. The equity portion, meanwhile, offers the potential for capital appreciation. This also maintains a balance between risk and return, making it a good choice for retirees.


Dealing with market volatility
Since these funds are a combination of high-risk equity investments, as well as medium- to low-risk debt instruments, investment in these can provide stability to one’s portfolio. The equity-debt mix mitigates the risk of market fluctuation and provides the required cushioning for the investment from high mark-to-market losses.

Long-term wealth creation
Balanced funds are a good investment option for long-term wealth creation. If one has a long investment horizon, balanced funds offer the potential for capital appreciation while managing risk.

Benefiting from market upswing
During market upswings, these funds help investors participate in the market rally while managing risk. While equity component benefits from market gains, debt component offers stability during fluctuations.

Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.