Balanced Equity Mutual Fund invests in Equity and Fixed Income securities in equal proportion to minimize the risk component in generating returns.
Balanced Equity Mutual Fund
Balanced Fund combines an investment of stocks and bonds in a single portfolio. Generally, these hybrid funds stick to a relatively fixed mix of stocks and bonds that reflects either a moderate (higher equity component) or conservative (higher fixed-income component) orientation.
A balanced fund is geared toward investors who are looking for a mixture of safety, income and modest capital appreciation. The amounts that such a mutual fund invests into each asset class normally remains within a range.
Types of Risks for Balanced Equity Funds
Market Risk also known as the Systemic Risk pertains to risk arising out of the overall performance of the stock and the fixed Income securities market. Domestic and International Stock Markets are subject to un-diversifiable risk or systemic risk as any unpredictable events can destroy value for the unit holders in a short period of time.
Investment Objective –
The primary objective is to generate capital appreciation along with current income from a combined portfolio of equity & equity related and debt & money market instruments.
Balanced Funds are for those investors who seek moderate returns from investments with controlled risk element as the assets include equity, debt and money market instruments.
Money Market instruments followed by debt and equity have an inherent increasing risk with expected higher returns in the mentioned order and thus the total risk depends upon the weightage of these assets in the portfolio.
The combination may vary for different balanced funds with 50% Equity and 50% Debt or with lower amount of Equity and higher amount of debt as well.