1. Balanced funds make more sense for long-term investors willing to take higher risk for better returns.
2. Unlike National Pension Scheme (NPS), they are open-ended schemes that allow you to withdraw investments anytime, with no lock-in or mandatory annuity as in NPS.
3. NPS cannot invest more than 75% in equity, while balanced funds have a minimum 65% equity exposure which goes up to 80%.
4. The fund manager does the automatic rebalancing, which locks in equity gains into debt, and actively manages the corpus with no restrictions in terms of sectors or stocks or bonds.
5. Although riskier than NPS, balanced funds provide a readymade portfolio to a beginner in mutual fund investments and have consistently rewarded investors over long-term.
6. Although balanced funds are costlier than NPS, this is adequately compensated by their superior returns during a longer track record.
7. Investments in NPS get a tax deduction under section 80C and 80CCD, and the withdrawal from NPS is tax-free too.
8. While there is no such exemption in case of balanced funds, the gains after one year become tax-free upto 1 lakh annually.
9. The comparable 5-year returns are also tilted in favour of balanced funds with 18-21% returns from top funds, when compared to 10.5% debt and 14-15% equity returns from NPS.
10. While young earners would immensely benefit from long-term balanced funds, even those turning 60 could also derive a lifelong inflation-friendly tax-free pension from a balanced fund through Systematic Withdrawal Plan (SWP) of monthly expenses.
2. Unlike National Pension Scheme (NPS), they are open-ended schemes that allow you to withdraw investments anytime, with no lock-in or mandatory annuity as in NPS.
3. NPS cannot invest more than 75% in equity, while balanced funds have a minimum 65% equity exposure which goes up to 80%.
4. The fund manager does the automatic rebalancing, which locks in equity gains into debt, and actively manages the corpus with no restrictions in terms of sectors or stocks or bonds.
5. Although riskier than NPS, balanced funds provide a readymade portfolio to a beginner in mutual fund investments and have consistently rewarded investors over long-term.
6. Although balanced funds are costlier than NPS, this is adequately compensated by their superior returns during a longer track record.
7. Investments in NPS get a tax deduction under section 80C and 80CCD, and the withdrawal from NPS is tax-free too.
8. While there is no such exemption in case of balanced funds, the gains after one year become tax-free upto 1 lakh annually.
9. The comparable 5-year returns are also tilted in favour of balanced funds with 18-21% returns from top funds, when compared to 10.5% debt and 14-15% equity returns from NPS.
10. While young earners would immensely benefit from long-term balanced funds, even those turning 60 could also derive a lifelong inflation-friendly tax-free pension from a balanced fund through Systematic Withdrawal Plan (SWP) of monthly expenses.