Upwardly presents to you the best balanced funds for 2019
|Rank||Fund Name||1 Yr Return||3 Yr Return||5 Yr Return||Invest|
|1||Principal Hybrid Equity Fund||-4.83%||15.28%||15.84%||Invest|
|2||ICICI Pru Equity and Debt Fund||-5.47%||12.63%||15.88%||Invest|
|3||Mirae Asset Hybrid Equity Fund||-2.54%||12.72%||-||Invest|
|4||ICICI Prudential Balanced Advantage Fund||0.90%||10.08%||12.85%||Invest|
|5||SBI Dynamic Asset Allocation Fund||4.44%||9.86%||-||Invest|
|Honourable Mention||HDFC Balanced Advantage Fund||-6.77%||14.29%||15.87%||Invest|
|6||HDFC Hybrid Equity Fund||-5.64%||11.99%||16.43%||Invest|
|7||Aditya Birla Sun Life Balanced Advantage Fund||-1.17%||11.57%||12.64%||Invest|
|8||Sundaram Equity Hybrid Fund||-0.50%||12.39%||11.45%||Invest|
|9||SBI Equity Hybrid Fund||-3.42%||10.21%||15.35%||Invest|
|10||Canara Robeco Equity Hybrid Fund||-0.92%||11.34%||15.96%||Invest|
Upwardly has handpicked 5 Best Balanced Funds that are best for investing in 2019.
Principal Hybrid Equity fund is one of the best balanced funds. It has been the best performing balanced fund in the last 3 years. The fund invests in companies that the manager believes are undervalued. It buys stocks with a long term investment perspective. The fund has outperformed its category by 2-5 percentage points in 3 and 5-year returns. The fund gave 11.08% p.a. returns since its inception in 2000. A SIP of ₹5,000 p.m. in this fund started 5 years ago is worth ₹4.07 lakh now.
With assets of ₹27,000 crore, ICICI Prudential Equity is the second largest equity oriented mutual fund in India. Earlier known as ICICI Prudential Balanced Fund, it is managed by ICICI Pru CIO S. Naren with others. The fund follows a rather conservative investment strategy in both equity and debt. On the equity side, the fund predominantly invests in large-cap stocks following value investing style. The fund is very conservative about taking on credit risks. Hence, the fund maintains a low profile with the debt portion. The fund has outperformed its category by 2 percentage points in 3 and 5-year returns. The fund gave 14.04% p.a. returns since its inception in 1999. A SIP of ₹5,000 p.m. in this fund started 5 years ago is worth ₹3.90 lakh now.
Mirae Asset Hybrid Equity fund allocates 65-80% of its assets to equity and 20-35% of its assets to debt. The fund positions itself as a low-risk alternative to pure equity schemes. It has a diversified portfolio of strong growth companies at reasonable prices. It has the flexibility to invest across any theme or style. For debt part of the portfolio, the company follows a top-down approach for taking interest rate view and sector allocation view. The fund has outperformed its category by 2-3 percentage points in the 1 and 3-year returns. The fund gave 9.63% return since inception in 2015. A SIP of ₹5,000 p.m. in this fund since its launch is worth ₹2.46 lakhs now.
ICICI Prudential Balanced Advantage Fund is a Hybrid mutual fund belonging to the Balanced Advantage Fund / Dynamic Asset Allocation category. This is one of the largest mutual funds in India with Assets Under Management or AUM of ₹25,663 crore. Also known as ICICI BAF, the fund invests in a mix of stocks and bonds. The fund uses the price to book value ratio or P/B ratio of the market to decide its equity allocation. The net equity exposure of the fund can range from 30% to 80% with debt making up the rest.
The fund invests in equity arbitrage opportunities to ensure that the total equity investment is higher than 65%. It gave 10.61% p.a. returns since its launch in December 2006. The fund is managed by ICICI Prudential CIO S. Naren along with Rajat Chandak, Manish Banthia, Ihab Dalwai. The funds 3 and 5-year returns are almost in line with its category average. A SIP of ₹5,000 p.m. in this fund started 5 years ago is worth ₹3.79 lakh now.
SBI Dynamic Asset Allocation Fund’s objective is to provide investors with an opportunity to invest in a portfolio which is a mix of equity and equity-related securities and fixed income instruments. The allocation between fixed income and equity instruments will be managed dynamically so as to provide investors with long term capital appreciation. The fund endeavours to meet its objective from asset allocation between asset classes. This approach will help reduce the risk of tracking individual asset classes.
The fund allocates higher weight to the asset class that is relatively favourable under the prevailing market and economic conditions. The optimal allocation between Equity, Debt and Cash will be based on three principles: Momentum, Rate of change in momentum and Exhaustion of momentum. The fund uses derivatives for portfolio rebalancing. The fund gave 7.36% return since inception in 2015. The fund’s 3-year returns are in line with its category returns. A SIP of ₹5,000 p.m. in this fund since its launch is worth ₹2.69 lakhs now.
Honourable Mention: HDFC Balanced Advantage Fund
HDFC Balanced Advantage Fund falls under the Hybrid Aggressive funds’ category. The technical difference is that while Hybrid Aggressive funds have their equity allocation above 65% – 80% at all times, the equity-debt percentage split in a BAF/DAA fund can swing substantially either side based on market conditions. Different asset classes exhibit different risk-return profile and relatively low correlation to each other as compared to investments within the same asset class. The debt-equity mix at any point of time will be a function of interest rates, equity valuations, medium to long term outlook of the asset classes and risk management, etc. The fund gave 18.38% return since inception in 1994. The fund’s 3-year and 5-year returns are 3-4 percentage points higher when compared to its category returns. A SIP of ₹5,000 p.m. in this fund since its launch is worth ₹3.99 lakhs now.
Balanced Mutual Funds
Balanced mutual funds invest in a combination of equity and debt. They are relatively less volatile than pure equity schemes that invest their entire corpus in stocks. They earn the “balanced” moniker by keeping the balance between the two asset classes pretty steady, usually placing about 65% of their assets in stocks and 35% in bonds.
Let me explain with an example why balanced funds are better in volatile market conditions:
Assume a balanced fund invests 65% in equity and rest 35% in debt instruments. If the investment amount is Rs 1 Lakh, it invests Rs 65,000 in equity and Rs 35,000 in debt. Assume the stock market returns 15% in the bull run and 5% in the bear run. The debt is a safe instrument, we will assume returns of 6% in all conditions.
You will get around 12% returns in the bull market (65,000*12% + 35,000 *6%)
You will get approx 5.35% returns in the bear market (65,000*5% + 35,000*6%)
As you can see the downside risk is reduced compared investing purely in equity.
Start your SIP in the best balanced funds at www.Upwardly.in
*These funds have an exit load of 1% if withdrawn before 1 year. We recommend investing in equity schemes for long-term.