5 Best Balanced Mutual Funds To Invest In

If you are looking to diversify your portfolio and can afford some risk, balanced or hybrid funds can be a one-stop investment solution offering you decent returns from equity exposure while protecting your capital with stake in debt securities. Here are suggested some of the best balanced mutual funds you can bet on to optimize return on your investment and also balance risk-reward ratio:

1. Canara Robeco Conservative Hybrid Fund - Regular Plan - Growth: Canara Robeco Conservative Hybrid Fund has performed very well in its category and has a 5-star Crisil rating. Only two of the funds in the Conservative hybrid fund category have been awarded this rating. An investment of Rs. 1 lakh made in the fund three years ago would grow to Rs. 1.25 lakh. If you were to invest for the same time horizon through Systematic Investment Plans or SIPs then with an investment of Rs. 10000 per month or Rs. 3.6 lakhs in 3 years, your portfolio would be valued at Rs. 4.10 lakh.

For hybrid fund both conservative and aggressive category, ideally you should have an investment horizon of 3 years or more so as to reap gains that are able to beat inflation rate and are perhaps more rewarding than other fixed income investment options.
1 year return from the fund has been 12.43% which is higher than the category average of 7.99%.

The fund's top equity holdings include stocks like HDFC Bank, IRCTC, ICICI Bank, RIL, Infosys and Maruti amongst others. As far its debt portfolio is concerned, it has holdings in 8.80% LIC Housing Fin., 8.35% IRFC, 7.37% GOI securities etc. As on February 10, the fund had an NAV of 61.78.

2. LIC MF Debt Hybrid Fund - Growth: This is another conservative hybrid fund which has got 5-star rating by CRISIL. NAV of the fund as on February 10, 2020 has been 58.59.

If you were to invest Rs. 1 lakh in lump sum three years ago, your capital would grow to Rs. 1.19 lakh. And if you happen to invest in this fund through SIP, a total of Rs. 3.6 lakh in three years (with a monthly SIP of Rs. 10000), your portfolio would value Rs. 4 lakh, generating 7.24% return on an annualized basis.

Some of the top stocks of the fund include ICICI Bank, HDFC Bank, Infosys, L&T, Nestle, HUL, Tech Mahindra etc. In its debt portfolio, the fund includes GOI securities, CD, commercial papers, T-bills and other such instruments.

3. Kotak Equity Hybrid- Growth: In its category, this aggressive hybrid fund from Kotak Mahindra Mutual fund has delivered average performance. The fund has been rated 3-star by Crisil. A sum of Rs 1 lakh invested in the fund about three years ago, would now fetch Rs 1.25 lakhs. 1-year annualized return from the fund has been 18.71% which is higher than the category average of 11.16%.

If you were to choose the SIP route, your investment worth Rs. 3.6 lakh with a monthly SIP of Rs. 10,000 would be Rs. 4.08 lakhs. The assets under management of the fund is to the tune of Rs 1,474 crores.

The stocks that comprise the portfolio of the fund include some of the heavyweights such as HDFC Bank, RIL, Infosys, L&T among others. In its debt portfolio, the fund has holding in G-securities as well as in funds that are invested in very low-risk securities.

4. Mirae Asset Hybrid Equity Fund - Regular Plan: From the aggressive hybrid fund category, so far this fund has delivered above average performance among peers. It commands a total fund size of Rs. 3190 crore and has an expense ratio of 1.89%. Rs. 1 lakh invested in the fund three years ago, would now be worth Rs. 1.35 lakh. Also, SIP in the fund can be initiated for a small amount of Rs. 1000 per month.

An SIP of Rs. 1000 per month started 3 years ago with an investment worth Rs. 36000 would now value Rs. 41355. This equates to 14.87% return in absolute terms.

The fund's constituent includes stocks such as HDFC Bank, RIL, ICICI Bank, SBI, L&T, TCS, ITC etc. The remaining investment of 22.2% is in government securities and other funds invested in low-risk securities.This fund enjoys 4-star rating from CRISIL.

5. SBI Equity Hybrid Fund - Regular Plan - Growth: The assets under management (AUM) of the fund is a whopping Rs. 31619 crore. In its category, the fund has managed to deliver above average returns. Investors can make a one-time investment in the fund for as less as Rs. 1000, while for the SIP one would need to make a minimum investment of Rs. 500. The fund has been rated 4-star by CRISIL.

A lump sum of Rs. 1 lakh invested in the fund 3 years ago would built a corpus a Rs. 1.42 lakh. But if you were to invest in through the SIP route, your investment of Rs. 3.6 lakh over a period of 3 years with an SIP of Rs. 10000 per month would turn to Rs. 4.27 lakh.
Over the 1-year term, the fund has offered an exemplary annualized return of 18.43% against the category average of 11.16%.

Some of the fund's stock constituents include HDFC Bank, Bharti Airtel BPCL, Infosys etc. Total equity holding in the fund stands at 72.73% while the rest is in debt and other instruments.

So, if you are expecting decent returns invest in these funds only if you have an investment horizon of 3 years or more. Remember from the next financial year, mutual funds with dividend option will be taxed in the hands of the investor.

Disclaimer: The article is not a solicitation to buy, sell in securities mentioned in the article. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author do not accept culpability for losses and/or damages arising based on information in this article.

About the Author: Roshni Agarwal has been covering personal finance and investment related articles for close to 5 years.

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