Before investing in balanced fund we need to know what balanced fund is. Balanced fund invests in both debt and equity (stocks). What is debt? In lay man words debt are fixed income instruments like bank FD, Government security bond etc. Who should invest in Balanced Fund? See there is no exact answer for this. However if you are risk averse and have fear for equity fund but still want to take a flavor of equity return in long run (more than 5 year) then probably this is a fund for you. I would say this is the best way to outsource your asset allocation….By investing in balanced fund you are asking mutual fund to do asset allocation between equity and debt .. Who decides how much of the fund should be in debt and how much on equity? The respective fund manager decides this. Example: HDFC Balanced Fund invests 71 % in equity and 26 % in debt. How Taxation works on this? As per regulation it was defined that the fund which invest 65 % or mo...
Personal Finance and Stock Investing Made Simpler