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Top 5 Best Balanced Mutual Funds - 2015 Top 5 Balanced Mutual Funds to invest in 2016


Some of the investors fear of risk and stay away from mutual fund investments in India. One of the best ways to overcome this is to invest in Top and best balanced mutual funds in 2016 . If you are moderate to low risk investor and willing to invest in mutual funds, balanced mutual funds / hybrid mutual funds are one of the best investment options for you. What are balanced / hybrid mutual funds? Which are the top 5 best balanced mutual funds to invest in 2016?

What are Balanced Mutual funds and how do they work?


Equity mutual funds generally invest a majority portion in the equity markets and would get exposed to market risks. However, balanced mutual funds on the other hand would invest 60% to 70% of the investment amount in equities and the balance of 30% to 40% in fixed income options like bonds, debentures, debt funds and other fixed income investment options. With such investment strategy, the amount invested in equities would provide growth in investment and the amount invested in fixed income provide stable returns. This way the risk is reduced in balanced mutual funds compared to equity mutual funds.

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Let me explain with an example. A balanced mutual fund scheme has invested 70% in equity markets and 30% in fixed income options (Investment amount Rs 100,000 – Split into Rs 70,000 in the equity markets and Rs 30,000 in fixed income options). Assume that the stock market has provided 15% returns in bull run and in bearish market it has provided only 6% returns.  In bull market, your investment would fetch you approx 13% returns and in a bearish market, your investment would fetch you approx 7% returns. The downside of risk is reduced if you compare the low returns in a bearish market. This way, it would be win-win situation in both situations. See the below table to understand how returns would look like.

Balanced Mutual Funds example

Top 5 Balanced Mutual Funds to invest in 2016

These top 5 balanced mutual funds to invest in India have been analyzed and shortlisted based on some of the important parameters.

  • These are picked based on highest returns received in the last 5 years.
  • Funds, which are rated by Crisil as Rank-1, Rank-2 and Rank-3 which indicates top performance across various market cycles.
  • Value research rated these mutual funds as 5 star, 4 star and 3 star.
  • AUM (Assets under management) > 100 Crores. This proves investor confidence among these top 10 mutual funds.
  • Some of the funds might be a repetition from my earlier recommendation.

Top-1: HDFC Balanced Mutual Fund


Funds objective: This mutual fund scheme aims to generate capital appreciation from a combined portfolio of equity and debt instruments. This scheme invests up to 60% in equity and balance in debt related instruments.

Fund Performance: This fund has beaten its benchmark and provided 18% annualised returns in last 5 years.  If you have invested in this fund for Rs 1,000 per month through SIP for 5 years, your total investment would have been Rs 60,000 and your investment value would have been Rs 105,000 now.

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Why to invest: This fund performed well in last 10 years and given 19% annualised return comparing to balanced fund category of 12%. It would reduce risk by investing part of the investment in debt instruments. Crisil Ranks it as Rank-2 and Value Research Ranks as 5 Star (5 out of 5). This is my favorite top balanced fund to invest for 2015 for medium to long term.

Top-2: ICICI Balanced Mutual Fund


Fund Objective: The scheme invests in equities and related securities as well as fixed income and money market securities. It invests 60% minimum in equity and balance in debt related instruments.

Fund Performance: This fund has beaten its benchmark and provided 18% annualised returns in last 5 years. If you have invested in this fund for Rs 1,000 per month through SIP for 5 years, your total investment would have been Rs 60,000 and your investment value would have been Rs 104,000 now.  Crisil Ranks it as Rank-1 and Value Research Ranks as 5 Star (5 out of 5).

Why to invest: This fund performed well in last 10 years and given 17% annualised return comparing to balanced fund category of 12%. It would reduce risk by investing part of the investment in debt instruments. This is one more top balanced fund to invest for 2015 for long term.

Top-3: HDFC Prudence Fund


Fund Objective: The fund scheme aims periodic returns and long-term capital appreciation from a balanced portfolio of debt and equity.

Fund Performance: This fund has beaten its benchmark and provided 16% annualised returns in last 5 years. If you have invested in this fund for Rs 1,000 per month through SIP for 5 years, your total investment would have been Rs 60,000 and your investment value would have been Rs 98,000 now.

Why to invest: This fund performed well in last 10 years and given 20% annualised return comparing to balanced fund category of 12%. It would reduce risk by investing part of the investment in debt instruments. Crisil Ranks it as Rank-2 and Value Research Ranks as 3 Star (3 out of 5). This is one more best balanced fund to invest for 2015 which has proven performance in the long run.

Top-4: Tata Balanced Fund


Fund Objective: The fund scheme aims periodic returns and long-term capital appreciation from a balanced portfolio of debt and equity.

Fund Performance: This fund has beaten its benchmark and provided 16% annualised returns in last 5 years. If you have invested in this fund for Rs 1,000 per month through SIP for 5 years, your total investment would have been Rs 60,000 and your investment value would have been Rs 104,000 now.

Why to invest: This fund performed well in last 10 years and given 19% annualised return comparing to balanced fund category of 12%. It would reduce risk by investing part of the investment in debt instruments. Crisil Ranks it as Rank-2 and Value Research Ranks as 4 Star (4 out of 5). This is another top and best fund to invest for 2015 for medium to long term .

Top-5: Birla Sun Life 95 Fund


Fund Objective: The fund aims to achieve long-term capital appreciation and current income from a balanced investment portfolio with an allocation of 60% equity and 40% debt and money market securities.

Fund Performance: This fund has beaten its benchmark and provided 15% annualised returns in last 5 years. If you have invested in this fund for Rs 1,000 per month through SIP for 5 years, your total investment would have been Rs 60,000 and your investment value would have been Rs 98,000 now.

Why to invest: This fund performed well in last 10 years and given 18% annualised return comparing to balanced fund category of 12%. It would reduce risk by investing part of the investment in debt instruments. Crisil Ranks it as Rank-3 and Value Research Ranks as 4 Star (4 out of 5). This is another good balanced fund to invest for 2015.

Top 5 Best Balanced Mutual Funds to invest for 2015

Conclusion : Investment in Balanced Mutual funds provides opportunity for moderate risk investors to invest in mutual funds and gain. Invest in these balanced mutual funds through SIP for medium to long term for superior returns. I feel these are one of the best investment plans .

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Suresh
Top 5 Balanced Mutual Funds to invest in 2016

45 comments

  • Mrs Jain

    Hi .. I recently got 35 lacs from a real estate sale. My age is 63 . I am looking at lumpsum investment in a balanced fund. The target is to have a 35 thousand monthly SWP from this investment (lets say starting when i reach 65). Kind of creating a pension plan for myself for the rest of my life.

    Please suggest if above is a good idea.

  • p.chaki

    You can go for franklin templeton flexicap fund ss SIP

  • Raj

    I am 32 years old,

    I want to start an sip of 1k for 10 years term. Pls suggest a balance fund…

    First time investor in mutual fund.
    What has to be selected growth or regular pls tel

  • Anil

    Sir, i have now invest in “UTI MNC FUND” 2000/- monthly. I want invest more 2000/- investment monthly through SIP.

    Plz suggest me some good fund name?
    My age now 28. Unmarried.
    1st one equty fund. Now i invest what type of fund balance/equty fund?

  • kangna

    Sir ..i read your article which is really helpful for a person like me who don’t have any idea about investment.i am a housewife and have saved 1 lac till now.i want to invest this in any balanced mutual fund .all i am looking for is good return after 10 years.please help with your suggestions-
    1. which balanced mutual fund i should go for total 1 lac amount and how many years should i leave it for excellent benefits ?
    2.will my principle amount be safe in this fund?
    3.what tax benefit will i get?
    4.whom i have to contact for this?
    5.is there any option to give the complete amount in one go or will i have to give it in monthly installments..which option is better?
    6.the interest comes only after maturity or is there any option in which one can get the interest amount every month..whats the better option according to you?
    please suggest Sir

    • Kangna, You can invest in Tata balanced fund or ICICI Balanced fund. Your principle may not be safe as these invests in stock markets. Best way is invest Rs 10K per month for next 10 months. This way you can reduce your risk. You can open MF account with any MF broker like icici direct or fundsindia. You can sell them anytime and your money would be credited in 3-4 working days after you sell these mf units. If you sell them after 1 year, returns are tax free

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