Here's all you need to know about balanced funds
Among the various types of investments in the market today, balanced funds or hybrid funds are characterised by their diversification among two major asset classes. They’re a type of mutual fund whereinhalf the investment is directed towards equity and related instruments while the other half is invested in debt instruments.Of this, the equity portionof balanced funds is inclined towards larger, dividend-paying companies, while the debtportion stabilises the risk of the equity investments. Though they provide relatively lower returns, balanced mutual funds are beneficial for two reasons: creating an income stream and reducing market volatility. Thus, the diversification availed through a balanced mutual fund investment allows you to bridge the gap between saving vs. investing. The primary purpose of these types of mutual funds is to offer you the best of both worlds. Besides, you should invest in balanced mutual funds for the following reasons: Taxability Under balanced mutual