Balanced mutual funds, especially Balanced Advantage Funds (BAFs), have gained massive popularity in recent years as they offer a mix of equity and debt, giving a cushion against volatility. In this article, we’ll explore the 5 best balanced mutual funds to invest in 2025 based on 3-year and 5-year rolling returns.
What Are Rolling Returns in Mutual Funds?
In one of our earlier article we discusssed about 6 Mutual Funds that turned ₹ 1 Lakh to ₹ 6 lakhs in 10 years we used annualised returns.
Rolling returns on other hand help evaluate fund performance across different time frames, rather than relying on point-to-point returns. It gives a better picture of consistency. For instance, 3-year rolling returns mean checking returns of the fund over every 3-year period (daily, monthly, or yearly) during a selected range. This helps assess how a fund has performed in multiple market cycles.
How We Filtered the Mutual Funds?
To identify the top balanced mutual funds for 2025, we followed a transparent and data-driven process:
- We analyzed Balanced Advantage Funds using data from 1-Jan-2013 to 17-Jul-2025.
- Considered 3-year and 5-year rolling returns during this period.
- Focused on consistency and average performance rather than single-period highs.
- Gave preference to funds with low downside risk and volatility.
Top 5 Balanced Mutual Funds Based on Rolling Returns
Here are the top 5 balanced mutual funds that stood out based on their rolling return performance:
#1 – HDFC Balanced Advantage Fund
- 3-Year Rolling Return: 22.95%
- 5-Year Rolling Return: 25.15%
- 10-Year Return: 14.74%
- Why it stands out: One of the most consistent performers with superior returns in both short and medium terms.
This mutual funds is among 5 Best Mutual Funds to invest in 2025 as per ChatGPT.
#2 – Franklin India Dynamic Asset Allocation Active FoF
- 3-Year Rolling Return: 16.83%
- 5-Year Rolling Return: 20.19%
- 10-Year Return: 11.25%
- Why it stands out: Strong 5-year rolling returns with a well-diversified allocation strategy.
#3 – Invesco India Balanced Advantage Fund
- 3-Year Rolling Return: 17.28%
- 5-Year Rolling Return: 14.48%
- 10-Year Return: 10.54%
- Why it stands out: Good balance between returns and downside protection.
#4 – Aditya Birla Sun Life Balanced Advantage Fund
- 3-Year Rolling Return: 16.36%
- 5-Year Rolling Return: 15.98%
- 10-Year Return: 11.98%
- Why it stands out: Stable and long-term player with consistent annualised returns. This is like 20 Equity Mutual Funds that generated positive returns every year in last 10 years.
#5 – Edelweiss Balanced Advantage Fund
- 3-Year Rolling Return: 15.71%
- 5-Year Rolling Return: 16.30%
- 10-Year Return: 11.40%
- Why it stands out: Steadily growing performer.
Annualised Returns Comparison – Top 5 Funds
| Fund Name | 3 Yr Return (%) | 5 Yr Return (%) | 10 Yr Return (%) |
|---|---|---|---|
| HDFC Balanced Advantage Fund | 22.95 | 25.15 | 14.74 |
| Franklin India Dynamic Asset Allocation FoF | 16.83 | 20.19 | 11.25 |
| Invesco India Balanced Advantage Fund | 17.28 | 14.48 | 10.54 |
| Aditya Birla Sun Life Balanced Advantage Fund | 16.36 | 15.98 | 11.98 |
| Edelweiss Balanced Advantage Fund | 15.71 | 16.30 | 11.40 |
Benefits of Investing in Balanced Mutual Funds
- Diversification: Exposure to both equity and debt instruments. Some of the diversified funds like Flexicap Mutual Funds too have generated massive wealth.
- Lower Volatility: Balanced allocation helps reduce sharp ups and downs.
- Dynamic Rebalancing: Fund managers shift allocations based on market conditions.
- Tax Efficiency: Long-term gains can be more tax-friendly compared to debt funds.
Risk Factors in These Funds
- Market Risk: Equity component is still subject to stock market fluctuations.
- Misallocation Risk: Incorrect timing in rebalancing can impact performance.
- Manager Dependence: Fund manager’s strategy plays a significant role.
- Medium-Term Horizon: These funds work better over a 3 to 5 year time frame.
Conclusion: Balanced Advantage Funds are ideal for investors looking for a mix of growth and stability. The 5 funds listed above have shown strong and consistent rolling returns, making them a good bet for 2025. However, investors should always align mutual fund investments with their risk appetite, investment tenure, and financial goals before investing.
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