Top 7 Best Balanced Mutual Funds to invest in 2017-2018 through SIP

Top and Best Balanced Mutual Funds to invest in 2017-2018-minTop 7 Best Balanced Mutual Funds to invest in 2017-2018 through SIP


Many investors fear of invesing in equity mutual funds as such funds invest in stock markets and they are high risk. One of the best way to reduce your risk is to invest in Top Balanced Mutual Funds through SIP. Balanced mutual funds also called as Hybrid mutual funds invests upto 65% in equity and balance in fixed income options. Which are the best Balanced Mutual Funds to invest in 2017 through SIP? Who can invest in these Top Balanced Mutual Funds 2017 in India? Couple of years back, I have provided some of the top 5 Best Balanced Mutual Funds and now, in this article, I would provide some analysis and list down top 7 Balanced Mutual Funds to invest in 2017-2018 in India.

Also Read: 10 Best Performing SIP Mutual Funds to invest for next 10 years

What are Balanced or Hybrid Mutual funds?


Equity mutual funds invests in various shares in company. It includes stocks from various market cap like, large cap, midcap and smallcap. Balanced mutual funds would invest upto 60% of the amount in equities and the balance of upto 40% in fixed income options like bonds, debentures and other fixed income investment options in India. With such strategy, the amount invested in equity would provide good growth in investment and amount invested in debt segment would provide stable and fixed returns. If you compare balanced fund vs equity fund,  the risk is reduced and returns are high in balanced funds.

Let me explain with an example. A balanced mutual fund scheme has invested 70% in equity markets and 30% in fixed income options which provides 9% returns (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.

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.

Top 7 Best Balanced Mutual Funds to invest in 2017-2018 through SIP


These top 7 balanced mutual funds have been analyzed and shortlisted based on some of the key parameters.

  • These are picked up based on highest returns given through SIP in last 5 years. While this parameter was considered earlier, I am giving high importance to this now while ranking in the top balanced funds list.
  • These are picked based on highest annualized returns in the last 5 and 10  years. Balance fund returns 10 years will help you to know whether fund is performing well in long run or not.
  • 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: 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 19% 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 94,000 now.  This is highest return through SIP in balanced mutual fund segment.

Why to invest: This fund performed well in last 10 years and given 12% annualised return comparing to Value Research balanced fund category of returns of 7.4%. It gave highest SIP returns in last 5 years. Crisil Ranks it as Rank-3 and Value Research Ranks as 4 Star (4 out of 5). As per VR (Valueresearchonline), Risk Grade is “Below Average” and Return Grade is “Above Average”. This is the top balanced fund to invest in 2017 for long term through SIP. This is even the best balanced mutual fund by value research.

Top#2: 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 93,000 now.  This is the second highest return through SIP in balanced mutual fund segment.

Why to invest: This fund performed well in last 10 years and given 14% annualised return comparing to Value Research balanced fund category of returns of 7.4%. It gave second highest SIP returns in last 5 years. Crisil Ranks it as Rank-2 and Value Research Ranks as 4 Star (4 out of 5). As per VR (Valueresearchonline), Risk Grade is “Below Average” and Return Grade is “Above Average”.This is the best balanced fund for SIP to invest in 2017-2018 for long term.

Also Read: Top 5 Tax Saving Mutual Funds to invest in India to get exemption u/s 80C

Top#3: Birla Sun Life 95 Balanced 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 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 92,000 now.  This is the third highest return through SIP in balanced mutual fund segment.

Why to invest: This fund performed well in last 10 years and given 14% annualised return comparing to Value Research balanced fund category of returns of 7.4%. It gave highest SIP returns in last 5 years. Crisil Ranks it as Rank-2 and Value Research Ranks as 3 Star (3 out of 5). As per VR (Valueresearchonline), Risk Grade is “Average” and Return Grade is “Average”.This is the top and best balanced fund to invest in 2017 for 5 to 10 years period.

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 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 90,500 now.  This is the 4th highest return through SIP in balanced mutual fund segment.

Why to invest: This fund performed well in last 10 years and given 14% annualised return comparing to Value Research balanced fund category of returns of 7.4%. This fund is one among the funds that gave highest SIP returns in last 5 years. Crisil Ranks it as Rank-3 and Value Research Ranks as 4 Star (4 out of 5). As per VR (Valueresearchonline), Risk Grade is “Average” and Return Grade is “Above Average”.This is the good balanced fund for SIP to invest for 2017 for a long term of 8-10 years.  

Top#5: 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 90,400 now.  This is the 5th highest return through SIP in balanced mutual fund segment.

Why to invest: This fund performed well in last 10 years and given 14% annualised return comparing to Value Research balanced fund category of returns of 7.4%. This fund is one among the funds that gave highest SIP returns in last 5 years. Crisil Ranks it as Rank-4 and Value Research Ranks as 3 Star (3 out of 5). As per VR (Valueresearchonline), Risk Grade is “Below Average” and Return Grade is “Average”.This is the top balanced mutual fund to invest for 2017 for a long term of 8-10 years.

You may like: How to get higher returns from Systematic Investment Plan (SIP) in Mutual Funds

Top#6: SBI Magnum Balanced Mutual 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 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 90,000 now.  This is the 6th highest return through SIP in balanced mutual fund segment.

Why to invest: This fund performed well in last 10 years and given 11% annualised return comparing to Value Research balanced fund category of returns of 7.4%. This fund is one among the funds that gave highest SIP returns in last 5 years. Crisil Ranks it as Rank-3 and Value Research Ranks as 4 Star (4 out of 5). As per VR (Valueresearchonline), Risk Grade is “Below Average” and Return Grade is “Average”.This is a good balanced mutual fund to invest for 2017 for a long term.

Top#7: L&T India 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 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 92,000 now.  This gave highest return compared to 5th and 6th fund indicated above, however considering the fund history of < 10 years, we pushed this to 7th position.

Why to invest: This fund performed well in last 5 years and given 18% annualised return comparing to Value Research balanced fund category of returns of 10%. This fund is one among the funds that gave highest SIP returns in last 5 years. Crisil Ranks it as Rank-3 and Value Research Ranks as 4 Star (4 out of 5). As per VR (Valueresearchonline), Risk Grade is “Below Average” and Return Grade is “Above Average”.This is a good balanced mutual fund to invest in 2017 for a long term.

Summary of Top Balanced Mutual Funds 2017


Performance of Top 7 Balanced Mutual Funds to invest in 2017-2018-min

What about Balanced Mutual funds Taxation?


Now you might be thinking about how balanced mutual funds are taxed. All the ones which I recommended here are equity oriented balanced mutual funds. These are taxed like any other equity mutual funds. Returns for less than 1 year are considered as short term capital gains and 15% tax needs to be paid. Any gains arising after 1 year are long term capital gains and they are tax free.

Also Read: Which are some of the best Monthly Income Plan Mutual Funds to invest now?

What are the balanced mutual funds advantages and disadvantages?


Here are the main advantages of investing in balanced funds:

  • It invests 60 to 65% in equities thereby reduces the risk.
  • It invests upto 35% to 40% in fixed income options which provides stability to returns.
  • Good for conservative and moderative risk takers.

Here are the main disadvantages of investing in balanced funds:

  • May not give high returns especially in bull run.
  • Funds invests upto 65% in equity, which has still some element of risk.

Conclusion: Balanced Mutual Funds invests upto 40% in fixed income options, hence are less risk compared to other equity mutual funds. These balanced mutual funds indicated here are good for moderate t low risk investors. These funds can deliver 12% to 15% annualized returns if you can invest for 8-10 years through SIP. You can invest in lumpsum too, however invest when markets are taking corrections.

Happy Investing in Balanced Mutual Funds!!!

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Suresh

Top 7 Best Balanced Mutual Funds to invest in 2017-2018 through SIP

57 comments

  • gayathri

    I am 60 years old I  already have a Rs2000 SIP in Axis long term equity fund for tax purpose 

    i now have to invest an additional 50000 lump some for tax this year I was planning on investing the 50000

    in Franklin India Elss fund  or should I select some other fund

  • Ajay Shastri

    Hello Suresh,

    I have been investing Rs.2000 on a monthly basis since 2015 towards HDFC TOP 200 Fund- Growth for a period of 5yrs.

    Starting today, I have added 2 more SIPs ICICI Prudential Balanced Fund – Growth(Rs.2000 monthly) and BSL Frontline Equity Fund – Growth(Rs.1000 monthly) to my portfolio for a period of 3 yrs based on your suggestion in the section "Top 10 best performing SIP MUtual Funds to invest in next 10yrs".

    Kindly advice in case of any changes required to my profile.

    Thanks,
    Ajay

     

  • Arjun

    Hi Suresh,

    Hope you are doing well.

    I am planning to start SIP from Apr-2017 onward with amount of 6k-7k. But i am totally new in this market. Please guide me how to plan SIP so that i can get good return. I am planning for long term(like 10-15 year).

    kindly provide your valuable suggestion.

    • First open MF account with any broker like icicidirect or fundsindia or any other broker. Sttart investing in large cap funds indicated in earlier articles. Keep reading our articles on mutual funds. Then you can invest in other funds which are best suitable to you.

  • minal

    Sir I will trying to invest monthly 1000 rupees for long term.so which sbi fund are low risk and best return

  • Saurabh Sharma

    Hello Sir,

    Thanks a lot for educating the world through your awesome posts..

    I am your regular blog reader I need advice from you..
    My age is 34 now and I have invested in Birla sun life manufacturing equity fund -G from last 2.5 years and it is giving around 13℅ interest.

    After reading your earlier post of investing in SIP I have invested below SIPS also.

    1. ICICI prudential value discovery Fund (G)-4000 monthly
    2.UTI equity Fund(G)- 4000 monthly
    3.SBI bluechip Fund(G)-4000 monthly
    4.Kotak select focus Fund Regular Fund(G)-4000 monthly

    Please advice if my portfolio looks good or I need to choose any balanced or hybrid Fund.

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