Balanced Mutual Funds

Balanced mutual funds are also known as hybrid mutual funds. In balanced mutual funds the money of the retail investor is invested in various asset classes like stocks, bonds and money market instruments. These types of mutual funds help investors to yield optimal returns over the time.

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Protection from inflation

Protection from inflation

Ideal for new investors

Ideal for new investors

Risk Reduction

Risk Reduction

Portfolio Diversification

Portfolio Diversification

Fund Categories
ICICI Prudential Asset Management Company LimitedHDFC Asset Management Co LtdSBI Funds Management LtdKotak Mahindra Asset Management Co LtdNippon Life India Asset Management LtdAditya Birla Sun Life AMC LtdAxis Asset Management Company LimitedUTI Asset Management Co LtdMirae Asset Investment Managers (India) Private LimitedDSP Asset Managers Private LimitedTata Asset Management LimitedBandhan Asset Management Company LimitedDSP Investment Managers Private LimitedIDFC Asset Management Company LimitedHSBC Asset Management(India)Private LtdCanara Robeco Asset Management Co. Ltd.Franklin Templeton Asst Mgmt(IND)Pvt LtdEdelweiss Asset Management LimitedInvesco Asset Management (India) Private LtdQuant Money Managers LimitedMirae Asset Mutual FundPPFAS Asset Management Pvt. LtdSundaram Asset Management Company LtdMirae Asset Global Inv (India) Pvt. LtdMotilal Oswal Asset Management Co. LtdBaroda BNP Paribas Asset Management India Pvt. Ltd.PGIM India Asset Management Private LimitedLIC Mutual Fund Asset Management LimitedDaiwa Asset Mgmt. (India) Pvt. Ltd.Mahindra Manulife Investment Management Pvt. Ltd.Fund PineBridge Mutual FundJM Financial Asset Management LimitedBaroda Asset Management India LimitedUnion Asset Management Co. Pvt. Ltd.Principal Asset Management Private LimitedJPMorgan Asset Management India Pvt. LtdEdelweiss Mutual FundWhiteOak Capital Asset Management LimitedBajaj Finserv Asset Management Limited360 ONE Asset Management LimitedBank of India Investment Managers Private LimitedITI Asset Management LimitedNJ Asset Management Private LimitedNavi AMC LimitedICICI Prudential Asset Mgmt.Company LimitedFranklin Templeton Asset ManagementIDBI Asset Management LimitedQuantum Asset Management Co Pvt. Ltd.Samco Asset Management Pvt LtdTrust Asset Management Private LimitedHelios Capital Asset Management (India) Private LimitedGroww Asset Management Ltd.Taurus Asset Management Company LimitedShriram Asset Management Co LtdZerodha Asset Management Private LimitedOld Bridge Asset Management Private LimitedING Investment Mgnt (India) Private Ltd.Baroda BNP Paribas Mutual Fund


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What are Balanced Mutual Funds?

Balanced mutual funds are those funds where the money is invested in various asset classes depending upon the investment objective of the investor.  These asset classes consist of the equity, bonds and money market instruments.  Balanced mutual funds can be categorized into two parts: equity-oriented and debt-oriented hybrid funds. In Equity oriented balanced mutual funds the majority money is invested in stocks of the publicly listed companies. Whereas on the other hand the debt oriented balanced mutual funds have majority of the investment is in the bonds of the companies. This type of funds ensures optimal returns, portfolio diversification, good for long to medium term investment.  

Benefits of Investing in Balanced Funds

Adding Balanced Funds to your investment mix can offer higher returns. Let’s see how!

  • Diversified Investment Portfolio

    These funds make sure that investments in equities and bonds are allocated fairly, which results in a diversified portfolio. By distributing assets across a number of asset classes, diversification lessens the impact of subpar performance in any one market area and helps to manage risk.

  • Regular Flow of Income

    The goal of balanced funds is to give investors a consistent flow of income. The allocation to debt instruments is appropriate for investors looking for a solid income component in their portfolio. Investors can choose debt-oriented funds for a steady and predictable flow of income.

  • Long-Term Creation of Wealth

    Balanced mutual funds are made for long-term wealth accumulation since they combine the stability of debt instruments with the growth potential of stocks. With a long-term approach, investors may take advantage of the compounding effect over time, which offers the possibility of significant wealth growth.

  • Deals with Market Volatility

    The combination of equity and debt helps to successfully manage the market volatility. While shares have growth potential, debt provides stability during market downturns. This balanced strategy allows investors to better handle market changes, lowering the overall impact of volatility on the investment portfolio.

  • Deals with Market Volatility

    The combination of shares and debt helps to successfully manage market volatility. While shares have growth potential, debt provides stability during market downturns. This balanced strategy allows investors to better handle market changes, lowering the overall impact of volatility on the investment portfolio.

  • Simplified Investment

    Investing in balanced mutual funds is simple for investors. Professional fund management and automated asset allocation alleviate investors of the complexity of actively managing their portfolio. Because of their simplicity, balanced funds appeal to consumers looking for a hassle-free investment experience with the opportunity for balanced returns

Who Should Invest in Balanced Mutual Funds?

Before you start your investment journey with balanced funds, it is important to know who is most suitable to invest in this fund. Read below to know when you should choose balanced funds for mutual fund investment:

  • Beginner to Mutual Fund Investment

    Balanced mutual funds are good for new investors since they include a mix of stocks and debt, allowing for a smoother introduction into the market. This diversity reduces the risks connected with certain asset classes, making it an appropriate alternative for people new to the financial scene.

  • Individuals with Low to Medium Risk Appetite

    Individuals with low to medium risk tolerance benefit from balanced mutual funds, which strike a balance between growth and stability. The presence of both equity and debt instruments protects against market volatility, matching the risk tolerance of conservative to moderately aggressive investors.

  • Aim for Diversified Investment

    Investors seeking diverse investment portfolios choose mutual funds. These funds distribute assets across sectors, industries, and asset classes to provide a well-rounded portfolio. This diversity reduces the risks associated with a single sector's performance, resulting in a more stable and resilient portfolio.

  • Hassle Free Investment Process

    Balanced mutual funds appeal to investors looking for a simple investment approach. Professional fund management allows investors to transfer all responsibilities to skilled fund managers. This hands-off approach streamlines the investment process, making it ideal for those who desire a controlled and stress-free investment experience.

Limitations of Investing in Balanced Mutual Funds

Even with their advantages, Balanced Mutual Funds come with certain limitations to consider:

How to Start Investing in Balanced Mutual Funds?

If you already have decided to invest in the Best Balanced Mutual Funds, it is time for you to know how to start your investment process. For this, you need to download the INDmoney app on your mobile phone and continue with the following process:

  • Step 1

    Download the INDmoney app and create your free investment account by completing your KYC ( Know Your Customer).

  • Step 2

    Once your Free investment account is ready, you can either search for Balanced Mutual Funds or go to the mutual fund section and tap on Hybrid Funds Catalog.

  • Step 3

    Choose a Balanced Mutual Fund by looking at aspects like past returns, volatility, downside capture ratio, AUMExpense ratios and underlying stocks and sectors.

  • Step 4

    You can choose to set up SIP in Balanced Mutual Funds or even invest as lumpSum. Once you are on the individual Balanced Mutual Funds page click from the bottom “One-time” for lump sum investment or “SIP” for systematic investment plan. 

  • Step 5

    Choose the amount that you want to invest as SIP or LumpSum. 

  • Step 6

    Set up payments. If you choose to set up SIP in Balanced Mutual Funds,  you can do a free automatic pay set up via bank mandate or UPI. If you choose to invest in lumpsum (one-time) then you can pay via UPI, netbanking, NEFT or RTGS.

Should You Invest in Balanced Mutual Funds?

Now that you know all the details about a balanced mutual fund, deciding on whether you should invest in this type of fund can be easy. Adding balanced funds to your portfolio is an easy way to invest in both equities and debt without having to do much market research. Even though you may not get high returns compared to pure equity mutual funds, these funds are a great option if you are a beginner. And what better way to start this journey than with INDmoney? With all attractive features and 0% commission on your investment, INDmoney assures you have a hassle-free investment journey

Frequently Asked Questions

Taxation of balanced funds (equity-oriented)

  • Long-term capital gains are taxed at a 10% rate on amounts exceeding Rs. 1 lakh in a financial year.
  • Short-term capital gains are taxed at 15%.

Taxation of balanced funds (non-equity-oriented)

  • As per applicable income tax slab.
  • HDFC Balanced Advantage Fund
  • Kotak Equity Hybrid Fund
  • ICICI Prudential Equity & Debt Fund
  • Edelweiss Balanced Advantage Fund

Balanced mutual funds offer an easy way for beginners to gain exposure to both equity and debt securities through a single fund. Some of their advantages include their regular income, better portfolio diversification, stability and risk mitigation.

Investment in a balanced mutual fund is favourable for beginners, people with less risk appetite, or who want to invest in a diversified portfolio.

For 1 year investment, you can get an average return of 17% to 29%, depending on the fund and market conditions. 

Holding on to a balanced mutual fund for a long tenure will let you grow wealth. 

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