Top 10 Aggressive Balanced Mutual Funds to invest in 2018-2019

Top 10 Agressive Balanced Mutual Funds to invest in 2018-finalTop 10 Aggressive Balanced Mutual Funds to invest in 2018-2019


Stock markets are volatile. While SENSEX is stable, mid cap and small cap stocks are taking a beating. One of the best ways to reduce your risk is to invest in Top Aggressive Balanced Mutual Funds through SIP. Balanced mutual funds, also called as Hybrid mutual funds invest up to 65% in equity and balance in fixed income options. Which are the best aggressive Balanced Mutual Funds to invest in 2018-2019 through SIP? Who can invest in these Top Balanced Mutual Funds 2018 in India? In this article, I would provide some analysis and list down Top 10 Aggressive Balanced Mutual Funds to invest in 2018-2019 in India.

Also Read: Top 5 Smallcap Mutual Funds to invest when markets are taking correction

What is Balanced or Hybrid Mutual funds?


Equity mutual funds invests in various stocks. It includes large cap stocks, mid cap stocks and small cap stocks. Balanced mutual funds would invest up to 60% of the amount in equities and the balance of up to 40% in fixed income options like bonds, debentures and other fixed income investment options in India. With this approach, the amount invested in equity would provide good growth in investment and the 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 higher 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. Assume that such fixed income option provides approx. 7% returns per annum. (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 7% returns.

In a bull market, your investment would fetch you approx 12.6% returns.

In a bearish market, your investment would fetch you approx 6% 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 10 Aggressive Balanced Mutual Funds to invest in 2018-2019


These top 10 balanced mutual funds have been analyzed and shortlisted based on some of the key parameters. One should note that due to re categorization of mutual fund schemes as per direction from SEBI, some of the parameters considered may not be 100% accurate.

1) These are picked up based on highest returns given through SIP in last 5 years.

2) These are picked based on highest annualised returns in the last 5 and 10  years..

3) Funds, which are rated by Crisil as Rank-1, Rank-2 and Rank-3 which indicates top performance across various market cycles.

4) Value research rated these mutual funds as 5 star, 4 star and 3 star.

5) AUM (Assets under management) > 100 Crores. This proves investor confidence among these top 10 mutual funds.

6) Some of the funds might be a repetition from my earlier recommendation. Some of these fund names have changed from last year after reclassification done by SEBI.

Top#1: Tata Retirement Savings Fund – Moderate Plan


Fund Objective: The mutual fund seeks to provide a financial planning tool for long term financial security for investors based on their retirement planning goals.

Fund Performance: This fund has beaten its benchmark and provided 20% annualised returns in last 5 years and 13% annualized returns in the last 3 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 highest return through SIP in the balanced mutual fund segment.

Why to invest: This fund performed well in last 5 years and given 20% annualised return comparing to Value Research balanced fund category of returns of 11%. It gave highest SIP returns in last 5 years. Crisil Ranks it as Rank-x and Value Research Ranks as 5 Star (5 out of 5). As per VR (Valueresearchonline), Risk Grade is “Average” and Return Grade is “High”. This is one of the best Aggressive Balanced Mutual Fund to invest in 2018-2019 in India.

Top#2: HDFC Hybrid Equity Fund


Fund Objective:  The MF Scheme seeks to generate capital appreciation / income from a portfolio, predominantly of equity & equity related instruments

Fund Performance: This fund has beaten its benchmark and provided 19% annualised returns in last 5 years and 10% annualized returns in the last 3 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 76,000 now.

Why to invest: This fund performed well in last 10 years and given 17% annualised return comparing to Value Research balanced fund category of returns of 11%. Crisil Ranks it as Rank-x and Value Research has not ranked this fund yet as this fund is formed by merger of HDFC Balanced fund and HDFC Multipcap fund.  

Top#3: ICICI Prudential Child Care Fund – Gift Plan


Fund Objective: The mutual fund scheme aims generate capital appreciation by creating a portfolio that is invested in equity and equity related securities (65-100%), and debt and money market instruments, securitised Debt & Cash (including money at call) 0-35%.

Fund Performance: This fund has beaten its benchmark and provided 19% annualised returns in last 5 years and 9% annualized returns in the last 3 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 82,000 now. 

Why to invest: This fund performed well in last 10 years and given 13% annualised return comparing to Value Research balanced fund category of returns of 11%. Crisil Ranks it as Rank-x and Value Research Ranks as 3 Star (3 out of 5). As per VR (Valueresearchonline), Risk Grade is “Above Average” and Return Grade is “Average”. This is one of the good Aggressive Hybrid Mutual Funds to invest in 2018-2019.

Top#4: L&T Hybrid Equity Fund


Fund Objective: The mutual fund scheme seeks to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity related securities and to generate reasonable returns through a portfolio of debt and money market instruments to help generating funds in the long term to save for the cost of children's education.

Fund Performance: This fund has beaten its benchmark and provided 18% annualised returns in last 5 years and 9% annualized returns in the last 3 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 85,000 now. 

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 13%. Crisil Ranks it as Rank-x 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”.

Top#5: HDFC Children's Gift Fund


Fund Objective: The MF scheme aims to generate capital appreciation / income from a portfolio of equity & equity related instruments and debt and money market instruments.

Fund Performance: This fund has beaten its benchmark and provided 18% annualised returns in last 5 years and 10% annualized returns in the last 3 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 85,000 now. 

Why to invest: This fund performed well in last 10 years and given 17% annualised return comparing to Value Research balanced fund category of returns of 11%. Crisil Ranks it as Rank-x 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”.

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Top#6: Principal Hybrid Equity Fund


Fund Objective: The fund scheme seeks long-term capital appreciation and current income from a balanced portfolio of equity and debt securities.

Fund Performance: This fund has beaten its benchmark and provided 18% annualised returns in last 5 years and 13% annualized returns in the last 3 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 87,000 now. 

Why to invest: This fund performed well in last 10 years and given 13% annualised return comparing to Value Research balanced fund category of returns of 11%. It gave 2nd highest SIP returns in last 5 years. Crisil Ranks it as Rank-x and Value Research Ranks as 5 Star (5 out of 5). As per VR (Valueresearchonline), Risk Grade is “Average” and Return Grade is “High”.

Top#7: SBI Equity Hybrid Fund


Fund Objective: The MF scheme seeks to provide investors long-term capital appreciation along with the liquidity of an open-ended scheme by investing in a mix of debt and equity. The scheme will invest in a diversified portfolio of equities of high growth companies and balance the risk through investing the rest in fixed income securities.

Fund Performance: This fund has beaten its benchmark and provided 17% annualised returns in last 5 years and 9% annualized returns in the last 3 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 87,000 now. 

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 11%. It gave 3rd highest SIP returns in last 5 years. Crisil Ranks it as Rank-x 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 one of the Top 10 Aggressive Hybrid Mutual Funds to invest in 2018-2019.

Top#8: ICICI Prudential Equity & Debt Fund


Fund Objective: The mutual fund scheme seeks to generate long-term capital appreciation and current income by investing in a portfolio that is investing in equities and related securities as well as fixed income and money market securities. The approximate allocation to equity would be in the range of 60-80 per cent with a minimum of 51 per cent, and the approximate debt allocation is 40-49 per cent, with a minimum of 20 per cent.

Fund Performance: This fund has beaten its benchmark and provided 17% annualised returns in last 5 years and 10% annualized returns in the last 3 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 84,000 now. 

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 11%. Crisil Ranks it as Rank-x 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”.

Top#9: Canara Robeco Equity Debt Allocation Fund


Fund Objective: The MF scheme seeks to build a balanced portfolio, which would provide a combination of high annual return and capital appreciation. The scheme was made open-ended from March 2000.

Fund Performance: This fund has beaten its benchmark and provided 17% annualised returns in last 5 years and 9% annualized returns in the last 3 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 84,000 now. 

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 11%. Crisil Ranks it as Rank-x and Value Research Ranks as 3 Star (3 out of 5). As per VR (Valueresearchonline), Risk Grade is “Average” and Return Grade is “Average”.

Top#10: Aditya Birla Sun Life Equity Hybrid '95 Fund


Fund Objective: The mutual fund  aims to generate long term growth of capital and current income, through a portfolio investing in equity, debt and money market securities. The secondary objective is an income generation and distribution of dividend.

Fund Performance: This fund has beaten its benchmark and provided 17% annualised returns in last 5 years and 9% annualized returns in the last 3 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 82,000 now. 

Why to invest: This fund performed well in last 10 years and given 15% annualised return comparing to Value Research balanced fund category of returns of 11%. Crisil Ranks it as Rank-x 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 one of the best Balanced Mutual Funds to invest in 2018.

How Balanced Mutual Funds are taxed?


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.

a) <= 1 year – Balanced mutual funds are taxed as STCG – 15%

b) > 1 year – Balanced mutual funds are taxed as LTCG – 10% on LTCG in excess of Rs 1 Lakh

What are the advantages and disadvantages of balanced mutual funds?


Here are the main advantages of investing in balanced funds:

1) These funds invest 60 to 65% in equities thereby reduces the risk.

2) It invests upto 35% to 40% in fixed income options which provides stable returns.

3) Good for conservative and moderate risk takers.

Here are the main disadvantages of investing in balanced funds:

1) These may not give higher returns, especially in a bull run.

2) Funds invest up to 65% in equity, which has still some element of risk.

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Here is the summary of these Top 10 Balanced Mutual Funds for 2018


List of Top 10 Best Aggressive Balanced Mutual Funds for 2018-2019

Conclusion: Balanced Mutual Funds invests up to 40% in fixed income options, hence is less risky compared to other equity mutual funds. These balanced mutual funds indicated here are good for moderate to low risk investors. These funds can deliver 10% to 15% annualized returns if you can invest for 8-10 years through SIP. You can invest in lump sum too, however only during market corrections.

Happy Investing in Aggressive Balanced / Hybrid Mutual Funds!!!

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Suresh

Top 10 Aggressive Balanced Mutual Funds to invest in 2018-2019

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