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ADVANTAGES OF BALANCED EQUITY MUTUAL FUNDS
1. It eliminates the efforts otherwise needed to invest individually in stocks, debt, money market instruments and gold.
2. It also eliminates the need to keep track of investments and periodic rebalancing to maintain a mix that suits your risk profile.
3. Balanced funds, therefore, provide investors with a single-point investment avenue that combines both growth and income objectives.
4. The debt exposure ensures stability of income whereas the equity portion provides appreciation when the stock market rises.
5. The mandated asset allocation between equity and debt also ensures that there is an automatic asset re-allocation, thereby eliminating the risk of imperfections of investment decision-making and market-timing caused by investor sentiments and psychology.
6. A natural diversification within the same scheme also brings in stability by balancing out one type of market movement with the others.
7. The fund manager’s ability to rebalance the equity and debt allocation helps investors as they need not maintain separate portfolios for equity and debt.
8. If the portfolio allocation goes haywire, the fund manager rebalances it, thus saving the investors from incurring exit loads if they were to do it themselves.
9. This auto-switching in balanced funds also makes investing in them more tax-efficient for investors as they do not need to pay any capital gains tax as they move from one asset class to the other.
2. It also eliminates the need to keep track of investments and periodic rebalancing to maintain a mix that suits your risk profile.
3. Balanced funds, therefore, provide investors with a single-point investment avenue that combines both growth and income objectives.
4. The debt exposure ensures stability of income whereas the equity portion provides appreciation when the stock market rises.
5. The mandated asset allocation between equity and debt also ensures that there is an automatic asset re-allocation, thereby eliminating the risk of imperfections of investment decision-making and market-timing caused by investor sentiments and psychology.
6. A natural diversification within the same scheme also brings in stability by balancing out one type of market movement with the others.
7. The fund manager’s ability to rebalance the equity and debt allocation helps investors as they need not maintain separate portfolios for equity and debt.
8. If the portfolio allocation goes haywire, the fund manager rebalances it, thus saving the investors from incurring exit loads if they were to do it themselves.
9. This auto-switching in balanced funds also makes investing in them more tax-efficient for investors as they do not need to pay any capital gains tax as they move from one asset class to the other.