Top 5 Balanced Mutual Funds to Invest in 2016

Top 5 Best Balanced Mutual Funds - 2015Top 5 Balanced Mutual Funds to invest in 2016


Some of the investors fear of risk and stay away from mutual fund investments in India. One of the best ways to overcome this is to invest in Top and best balanced mutual funds in 2016. If you are moderate to low risk investor and willing to invest in mutual funds, balanced mutual funds / hybrid mutual funds are one of the best investment options for you. What are balanced / hybrid mutual funds? Which are the top 5 best balanced mutual funds to invest in 2016?

What are Balanced Mutual funds and how do they work?


Equity mutual funds generally invest a majority portion in the equity markets and would get exposed to market risks. However, balanced mutual funds on the other hand would invest 60% to 70% of the investment amount in equities and the balance of 30% to 40% in fixed income options like bonds, debentures, debt funds and other fixed income investment options. With such investment strategy, the amount invested in equities would provide growth in investment and the amount invested in fixed income provide stable returns. This way the risk is reduced in balanced mutual funds compared to equity mutual funds.

Also Read: What are the various ways to invest lump sum money in Mutual Funds in India?

Let me explain with an example. A balanced mutual fund scheme has invested 70% in equity markets and 30% in fixed income options (Investment amount ₹ 100,000 – Split into ₹ 70,000 in the equity markets and ₹ 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 and 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.

Balanced Mutual Funds example

Top 5 Balanced Mutual Funds to invest in 2016

These top 5 balanced mutual funds to invest in India have been analyzed and shortlisted based on some of the important parameters.

  • These are picked based on highest returns received in the last 5 years.
  • 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: 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 ₹ 1,000 per month through SIP for 5 years, your total investment would have been ₹ 60,000 and your investment value would have been ₹ 105,000 now.

Also Read: Should you invest in Banking Sector Mutual Funds which are expected to rock now in coming months?

Why to invest: This fund performed well in last 10 years and given 19% annualised return comparing to balanced fund category of 12%. It would reduce risk by investing part of the investment in debt instruments. Crisil Ranks it as Rank-2 and Value Research Ranks as 5 Star (5 out of 5). This is my favorite top balanced fund to invest for 2015 for medium to long term.

Top-2: 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 18% annualised returns in last 5 years. If you have invested in this fund for ₹ 1,000 per month through SIP for 5 years, your total investment would have been ₹ 60,000 and your investment value would have been ₹ 104,000 now.  Crisil Ranks it as Rank-1 and Value Research Ranks as 5 Star (5 out of 5).

Why to invest: This fund performed well in last 10 years and given 17% annualised return comparing to balanced fund category of 12%. It would reduce risk by investing part of the investment in debt instruments. This is one more top balanced fund to invest for 2015 for long term.

Top-3: 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 ₹ 1,000 per month through SIP for 5 years, your total investment would have been ₹ 60,000 and your investment value would have been ₹ 98,000 now.

Why to invest: This fund performed well in last 10 years and given 20% annualised return comparing to balanced fund category of 12%. It would reduce risk by investing part of the investment in debt instruments. Crisil Ranks it as Rank-2 and Value Research Ranks as 3 Star (3 out of 5). This is one more best balanced fund to invest for 2015 which has proven performance in the long run.

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 16% annualised returns in last 5 years. If you have invested in this fund for ₹ 1,000 per month through SIP for 5 years, your total investment would have been ₹ 60,000 and your investment value would have been ₹ 104,000 now.

Why to invest: This fund performed well in last 10 years and given 19% annualised return comparing to balanced fund category of 12%. It would reduce risk by investing part of the investment in debt instruments. Crisil Ranks it as Rank-2 and Value Research Ranks as 4 Star (4 out of 5). This is another top and best fund to invest for 2015 for medium to long term.

Top-5: Birla Sun Life 95 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 15% annualised returns in last 5 years. If you have invested in this fund for ₹ 1,000 per month through SIP for 5 years, your total investment would have been ₹ 60,000 and your investment value would have been ₹ 98,000 now.

Why to invest: This fund performed well in last 10 years and given 18% annualised return comparing to balanced fund category of 12%. It would reduce risk by investing part of the investment in debt instruments. Crisil Ranks it as Rank-3 and Value Research Ranks as 4 Star (4 out of 5). This is another good balanced fund to invest for 2015.

Top 5 Best Balanced Mutual Funds to invest for 2015

Conclusion: Investment in Balanced Mutual funds provides opportunity for moderate risk investors to invest in mutual funds and gain. Invest in these balanced mutual funds through SIP for medium to long term for superior returns. I feel these are one of the best investment plans.

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Suresh
Top 5 Balanced Mutual Funds to invest in 2016

Suresh KP

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45 comments

    1. Hi Abdul, Since markets are at peak, it is not advisable to invest lumpsun in equity or balanced funds. You can invest in debt funds and do systematic transfer plan to balanced funds (5-8 months minumum). You can invest in HDFC balanced fund or ICICI balanced funds.

  1. I want tu invest only 10000/month for 3 years.
    Let me know the combiNation of balanced and infrastructure.

  2. I want to invest in Balance funds please suggest some good fund to invest for 10 years 5000 per month 

    Ashutosh Shukla 

  3. Hi .. I recently got 35 lacs from a real estate sale. My age is 63 . I am looking at lumpsum investment in a balanced fund. The target is to have a 35 thousand monthly SWP from this investment (lets say starting when i reach 65). Kind of creating a pension plan for myself for the rest of my life.

    Please suggest if above is a good idea.

  4. I am 32 years old,

    I want to start an sip of 1k for 10 years term. Pls suggest a balance fund…

    First time investor in mutual fund.
    What has to be selected growth or regular pls tel

  5. Sir, i have now invest in “UTI MNC FUND” 2000/- monthly. I want invest more 2000/- investment monthly through SIP.

    Plz suggest me some good fund name?
    My age now 28. Unmarried.
    1st one equty fund. Now i invest what type of fund balance/equty fund?

  6. Sir ..i read your article which is really helpful for a person like me who don’t have any idea about investment.i am a housewife and have saved 1 lac till now.i want to invest this in any balanced mutual fund .all i am looking for is good return after 10 years.please help with your suggestions-
    1. which balanced mutual fund i should go for total 1 lac amount and how many years should i leave it for excellent benefits ?
    2.will my principle amount be safe in this fund?
    3.what tax benefit will i get?
    4.whom i have to contact for this?
    5.is there any option to give the complete amount in one go or will i have to give it in monthly installments..which option is better?
    6.the interest comes only after maturity or is there any option in which one can get the interest amount every month..whats the better option according to you?
    please suggest Sir

    1. Kangna, You can invest in Tata balanced fund or ICICI Balanced fund. Your principle may not be safe as these invests in stock markets. Best way is invest Rs 10K per month for next 10 months. This way you can reduce your risk. You can open MF account with any MF broker like icici direct or fundsindia. You can sell them anytime and your money would be credited in 3-4 working days after you sell these mf units. If you sell them after 1 year, returns are tax free

  7. I m new for mutual funds, earlier I invested in FD only.now I want to invest in SIP . Which will be better for me with having low risk.
    Please suggest

  8. Hi Suresh,

    Could you please also suggest that from where we can buy these funds. I know we can go to that particular bank and buy it. however could you please suggest which authentic company or etc we can buy these debt funds.

  9. Hello,

    What are your comments for L & T India Prudence Fund (Growth) and Kotak Equity Savings Fund (Growth)
    I am new to all this and am planning to start very soon since I have just retired and have accumulated
    savings which I can use to earn passive income.

    1. one of my friend invested same amount, same date with L&T and Tata balanced funds, now L&t earned 7000-00 more than Tata Balanced fund.

  10. SIR,
    I regularly watch your site. Because of your suggestion i invest top 10 mutual fund 2014. We realised that they are really good performed funds. Thank you so much for your support and guidance.

  11. Dear Suresh
    I am an avid reader of your blog. I read it regularly.Thanks for ur investment ideas..I am a student of 25 years.I have invested in SIP
    TATA BALANCED FUND(GROWTH)- RS-1000
    I am thinking of investing in
    HDFC balnced fund and ICICI balnced fund….please advise if I should go for it…
    thanks

  12. Hi,
    Given below is my MF portfolio. I have just started in 2015. Please let me know if the below funds are good.

    100000 – ICICI focussed Bluechip (2 months old)
    30000 – Tata Balanced Fund (2 months old)
    5000 – SIP in Axis equity Fund (G) ( 3 months old)

    I just came to know the Small and Mid cap funds are giving best returns compare to all the other funds.
    I would like to invest a bulk amount in Small and Mid cap funds. Could you please suggest anything. I am ready to accept the risk.

    Thanks,
    Nellaiappa Subramanian

  13. Hello Suresh sir,

    Thankyou for your inputs on financial aspects. You are doing a wonderful job!

    I am 30 years old with one dependant on me. I am a moderate risk taker. Based on your inputs I have been investing SIP 1000 pm in these 5 MF since Aug 2014.

    HDFC top 200, HDFC mid cap Opp, HDFC balanced fund, Can robecco eq tax saver, Quantam long term equity.

    I am a moderate risk taker. Please analyse my profile and suggest if any changes are required. Also, while filling the forms for MF i have stated the term as 3 years. However, after reading your blogs, my understanding is that MFs give good returns if invested for long terms ie.8-12 years.

    My question is,
    1) Is t possible to increase the years of investment? If yes how to go about it?
    2) I also want to increase the SIP amount from 1K to 2K. Is it possible?
    3) Should I add one more sector based MF or should just increase the SIP amount in same MF.

    Thanks

    Vijay

    1. Vijay, You can just modify the existing SIP schemes and modify the years and amount. Alternatively you can start re-investing once you complete your SIP period.  You are moderate risk taker, hence don’t invest in sector fund. Increase the amount in existing equity funds like HDFC Top 200, HDFC Balanced etc.,

  14. Hi Suresh,

    I am a regular reader of your blog. I appreciate your efforts towards educating and helping us to make the right choice of investments.

    I am 27 years old and I earn 50k per month. I have my investments in MF already.

    I have invested in:
    1. HDFC Top 200 Direct growth – Rs1000
    2. IDFC premier equity Direct growth – Rs2000
    3. Reliance Pharma fund Direct growth – Rs1000

    And I want to add 2 balanced funds
    1. HDFC balanced fund Direct growth – Rs1000
    2. HDFC Prudence fund Direct growth – Rs1000

    Please advise if I should go ahead with it.

    Thanks in advance.

    Best regards,
    Joy

  15. Dear Suresh,
    for Equities mutual fund return, no need to pay tax. what about return from dept fund ? need to pay tax?

  16. Sir, I would like to invest Rs.20000=00/month in SIP for only one year.(Rs.5000 x 4 diffrent companies) . Approx. what is the range of profit % per year and which SIP are better to invest now.

  17. Dear Suresh Sir,

    Looking to hear your advice regarding the below funds.As a newcomer, without any financial background last month I started the below sector mf as SIP.
    1) UTI Transportation & Logistics-G
    2) SBI Pharma-G
    3) RELIANCE Pharma-G
    But when I started to go through in different blogs and fund advisors blogs, I felt that these sector funds are little bit risky and needed to be monitored closely on regular intervals. Should I continue these funds or just stop payments?

    My investments are for long term goals for 15-20 years and its for my kids higher education and future needs.
    After reading various articles and blogs, I short listed the below equity funds for my long term goals.

    1) HDFC Top 200 Fund
    2) Birla Sun Life Frontline Equity Fund
    3) ICICI Prudential Value Discovery Fund – Regular Plan
    4) Reliance Equity Opportunities Fund
    5) HDFC Mid-Cap Opportunities Fund
    6) Franklin India Flexi Cap Fund
    7) IDFC Premier Equity Fund – Regular Plan
    8) UTI Opportunities Fund
    9) HDFC Balanced Fund
    10) Axis Long Term Equity Fund

    Could you please help me to select 5 best long term funds from this list to go for SIP.
    Any other fund suggestions from your end for long term investments?

    Thanking you,
    Loyit Mathew

  18. Dear sir,
    I invest in icici pru blue chip 1000 pm and almost 10 months in 2011 but after that I quit it bcs I quit job so no earning till today……so what should to do? Have I wait to more or break it

    Thanks
    Utkarsh

  19. Dear Suresh , I was looking at long term investment into SIP as part of my retirement fund , The period I am looking for is 10 years and the amount about 6 L

    I was looking at investing 6L lumpsum into ICICI Prudential Long Term Fund-Direct Plan and then start 2 SIP via STP

    1 ) ICICI Balanced Fund ( 2.5 k pm )
    2 ) ICICI MIP 25 ( 2.5 k pm )

    Can you advise its a good way to go for long term financial planning for retirement ?

    Will STP from ICICI Pru LT Fund into these two MF will invite any kind of capital gain tax ?

    While for SIP I am opting for Growth Option but for ICICI Pru Fund should I opt for Growth or Div Reinvest ?

    Thank You

    1. Hi Joseph, The concept is correct. However select funds into balanced and large cap. You have selected MIP which aims to provide regular income. You do not need this money now right? In such case invest in large cap fund. Yes, this would attract short capital gain tax as it is less than 36 months. If you investment is for growth, always invest in growth option.

  20. Hello Sir,

    I out of college from 2012 and am in a job for last 1 year 3 month.
    I am new to mutual fund and have atmost 2000 pm to invest in sip( my salary is 26000 pm and have saving of Rs 60000).

    Which SIP should I start. I am not looking for high risk.

    Thanks
    Subhojit

    1. Subhojit, Since you are new to investment, my suggestion is to invest in balanced mutual funds indicated in this article to start with. 1) Invest in ICICI Balanced fund and HDFC Balanced fund. Keep some amount into recurring deposits also. 2) Once you are familar on how mutual funds operate, you can invest in large cap funds and diversified mutual funds. 3) If you can take some risk, you can invest in top 5 mid cap and small cap funds which I have recommended. But note that you should hold them for 8 to 10 years to get good returns. You can keep tracking every month on how your funds are progressing

  21. Dear Suresh ,

    Thank You for replying to my query on another article.

    Thanks for the write up on Balanced Fund , Reading upon it I have decided to do an SIP of Rs 5k pm on Balanced MF for a period of 5-6 years.

    Though I have invested a single amount of 5k in HDFC Balanced Fund , Would it be advisable to break it up 2.5/2.5 and invest it equally in HDFC and ICICI Balanced fund ? Or a Single SIP of 5K in HDFC Balanced Fund should be fine ?

  22. Hello Sir,

    I am a new visitor to your blog – and it’s really impressive. I am 32 years old and i can invest 15,0000 – 20,000 RS / Month
    in mutual funds . Can you please suggest how i should invest this amount in high risk / Medium risk / low risk MFs ?
    Can you please suggest the MF names also since i am very new to this . Note : I am ready to take high risk investments.

    Regards,
    Senthil.

  23. Dear Suresh Sir,

    I am doing long term planning for my parent ( Mother ) as part of their retirement and hence would want to put their money in safe fund with limited expose to risk,My Mother is currently age 59 would be retiring in few month

    I am looking at investing part of their retirement fund of Rs 10 Lacs in MF , Right now I have an amount of Rs 3 Lacs and in near future would be getting 6 Lacs.The remaining 10 Lacs would be invested in Postal Saving MIP or FD.

    I am planning to invest the 3 Lacs plus 6 Lacs total 10 Lacs in

    ICICI Prudential Flexible Income Plan-Direct with Dividend Re-Investment option.With that 10 Lac I am planning to invest in 2 SIP opting for Growth Option for both

    ICICI Balanced Mutual Fund – 7000 pm
    ICICI Prudential Child Care Plan(Study)- 7000pm

    This SIP would run for a period of 6 Years.Can you suggest if this is a right course of Action and if not so can you suggest appropriate changes as per your advise.

    Thank You.
    Joseph

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