January 17, 2018

Top 5 Best Balanced Funds 2018 to invest in India

 

Which are the Top 5 Best Balanced Funds 2018 to invest in India? Balanced funds nowadays are being sold like hotcake in India. Mainly because of tax advantage, automatic asset allocation and the best returns they generated. However, how to choose the best among the existing funds?

What is the Balanced Fund?

There are mainly two categories of Balanced Funds in India. One is Equity Oriented Balanced Funds and another is Debt Oriented Balanced Funds.

Equity-Oriented Balanced Funds, primarily have minimum 65% equity exposure so that they can be classified as equity funds for the tax purpose. The remaining 35% to 25% will be in debt securities like gilts, corporate bonds, money-market instruments etc.

Debt-Oriented Balanced Funds, primarily have less than 65% equity exposure to equity and rest will be in debt securities like Gilts, Corporate Bonds, Money Market Instruments etc.

Equity Oriented Balanced Funds are considered as equity funds for taxation purpose (even though there is around 35% to 25% debt exposure). However, Debt-Oriented Balanced Funds are considered as Debt Funds for taxation purpose and taxed accordingly.

However, in this post, I am concentrating only on Equity-Oriented Balanced Funds.

Balanced Fund Taxation

As I said above, there are two types of Balanced Funds. One is Equity-Oriented Balanced Funds and another is Debt-Oriented Balanced Funds.

Equity Oriented Balanced Funds are treated like pure equity funds. However, Debt Oriented Balanced Funds are treated as debt funds for taxation purpose.

The current tax structure of Mutual Funds is explained in below image. First let us understand what is LTCG and STCG from below image.

Mutual Fund Taxation FY 2018-19

Now let us understand the current tax rate applicable for Mutual Funds.

Below is the current DDT rate applicable for all Mutual Funds after the Budget 2018.

Mutual Fund Taxation FY 2018-19 - DDT or Dividend Distribution Tax

For complete details, refer my post “Budget 2018 – Mutual Fund Taxation FY 2018-19“.

 

Top 5 Best Balanced Funds 2018 to invest in India

Now let us select the Top 5 Best Balanced Funds 2018 to invest in India. Below is the list of my Top 5 Best Balanced Funds 2018 to invest in India.

Top 5 Best Balanced Funds 2018 to invest in India

You noticed that all funds follow the Crisil Balanced Fund Benchmark. However, what this Crisil Balanced Fund Benchmark constitutes is unavailable to the public. Because this costs Rs.11 lakh a year. Hence, such information is not available to us to do further research on the benchmark.

Portfolio of Top 5 Best Balanced Funds 2018 to invest in India

In above image, I shared you the return part of last 10 years. Now let us dig deep and find out some signals in relation to the CURRENT portfolio of these Top 5 Best Balanced Fund 2018 to invest in India.

This how the current portfolio looks for equity and debt.

Portfolio of Top 5 Best Balanced Funds 2018 to invest in India

You noticed that HDFC Balanced Fund holding higher small-cap portfolio than the other funds. Also, when it comes to debt portfolio, Tata Balanced Funds average maturity is highest and then comes the HDFC Balanced Fund. The credit quality of the underlying bond papers is HIGH for Tata Balanced Funds. Rest of all the funds credit quality is AA.

Notice the average maturity of the debt portfolio, it is in between around 7 years to 4 years. Do remember that higher the maturity higher the volatility risk for debt portfolio.

Advantages of Balanced Funds

# Diversification-

As these funds invest both in equity and debt category, you will find the diversification in a single fund. Due to such diversification, these funds have lower standard deviation than the pure equity funds. Lower standard deviation means lower risk.

# Re-Balance and Asset Allocation-

The fund manager rebalances the portfolio based on market conditions and asset allocation limits periodically and maintains the asset allocation without any tax implications or exit load.

This will reduce the volatility and also preserve the gains. Hence, you are freed from manual re-balancing.

# Taxation-

For the taxation purpose, equity-oriented balanced funds are treated as equity funds. Hence, even though such funds have a certain portion of debt portfolio, the debt portfolio also be tax-free.

This seems to be the biggest advantage to many. In case you separate your asset allocation between debt and equity by investing separately in debt funds or equity funds, then for debt part, whether in short term or long term, you have to pay the tax (based on tax rules shared above). However, with equity-oriented balanced funds, such debt part is completely tax-free.

Disadvantages of Balanced Funds

# Considering for short-term goals

Due to above-said advantages, many investors, in fact, many advisers recommending equity-oriented balanced funds for short-term goals which may be even less than 5 years.

They completely neglecting the equity exposure of such funds.

# Unable to understand the portfolio

Many of us feel that minimum 65% of the portfolio is in equity and rest is in debt. Hence, debt part is totally SAFE. But they fail to understand what types of debt portfolio the is investing.

Even in case of the equity portfolio, you must analyze the stocks the fundholding. If the fund has higher exposure towards mid and small cap stocks, then it is riskier than holding a pure large cap fund.

Some suggestions:-

  1. Never consider equity-oriented balanced funds if your goal is less than 5 years or so.
  2. Even if more than 5 years also, consider such funds as pure equity funds and try to allocate some portion of your investable amount to debt funds also.
  3. Never try to chase the returns. Equity Oriented Balanced Funds are also risky like other diversified equity funds.
  4. Never be in wrong belief that Debt Portfolio of the Equity Oriented Balanced Funds are completely SAFE. Based on the modified duration (sadly I am unable to find for these balanced funds), average maturity and credit rating of underlying bonds, the bond portfolio shows you the volatility.
  5. Finally, never invest in such funds just with the intention that debt part of these funds is tax-free.

Refer our other posts also:-

164 Comments

  1. Hello Sir,

    I am 29 years old and want to start investing for retirement in mutual fund. My investment horizon is 25 years and current savings is Rs. 10K per month. What should be the ideal/best mutual fund portfolio to accomplish my goal ? I have moderate risk appetite.

    Reply
  2. hello sir,
    thanks for your time in creating site and answering every single query. i am totally new to mutual funds, though i study i am getting confused the more i study the more i get confused. i am ready to consult professional help dont know how to contact, pls help

    Reply
    • Dear Shankar,
      Use the Contact Us page of this blog to be in touch with me for professional guidance.

      Reply
  3. Hello Sir ,

    Please suggest what happen if I want to stop the SIP but will stay invested in the fund for long period .

    Reply
    • Dear Tanuj,
      Yes, you can stop at any point of time and continue to hold the invested amount as long as you wish.

      Reply
  4. Dear Basu,

    Age 46, Goal- Daughter education, Time horizon 8 yrs,

    I have a doubt regarding HDFC balanced fund. After its merger with HDFC HDFC Hybrid Equity Fund, the scheme (HDFC balanced fund) slipped by huge margin in comparison to its benchmark as well as peers.

    Is it OK to start investing in it or do I need to choose other Balanced fund (Like ICICI).

    Reply
    • Dear Pappu,
      After the change, immediate return comparison is not at all a right strategy. Hence, go ahead.

      Reply
  5. Hello Basavraj,

    Thanks for your effort in sharing information through blog posts, very helpful.

    I had a query related to investment and grateful if you can share your thoughts on it.

    Let’s say that there are 3 financial goals which one has to achieve in year 2030, 2035 and 2040. The investor selects a fund and wants to invest through SIP in it.

    Now, there are two scenarios here as following:

    Case 1 – Investor starts one SIP of 30,000/- and then regularly draw from corpus at 2030, 2035 and 2040

    Case 2 – Investor starts 3 SIP each of 10,000/- for 2030, 2035, 2040 and use up the corpus

    In case 1, will there be less amount generated as compared to case 2 as we are drawing from same corpus when goal year arrives?

    But if we go for case 2, will there not be more things to manage given one SIP for every goal separately?

    Here, the funds are same for both the cases and all other conditions are same.

    Thus, as per your experience, which case you prefer to go for?

    Thanks for the help.

    Reply
    • Dear Vivek,
      If the funds are same, then it does not matter whether you create three separate FOLIOS and start investing separately Rs.10,000 each for 2030, 2035 and 2040. I prefer a single portfolio of Rs.30,000 for the sake of simplicity.

      Reply
      • Thanks Basavaraj, actually I was just wondering that if we have single portfolio then when we withdraw amount from the the fund, say for the first goal in its respective year, then that would undermine the power of compounding reducing the principal for next year.

        I also performed few calculations in this regard, and found that in case of single portfolio, after say first goal is met and we reduce the SIP to 20,000 then overall amount decreases for other goals, but such is not the case if we keep the SIP of 30,000 going even if the first goal is met.

        And yes, for simplicity, single portfolio is certainly better.

        Thanks again for your thoughts on this Basavraj.

        Regards

        Reply
  6. I have been investing in Tata Balanced Fund( 2yrs) but the returns so far has been very disappointing(~5%), should I continue to invest or switch to HDFC Balanced Fund ?

    Reply
  7. Hi Basavaraj,

    Please suggest me couple of Mutual funds which can give me returns of atleast 10% for 10 years, i wanna do lumpsum investment

    Reply
    • Dear Vishwanath,
      Without doing asset allocation and just plain 10% expectation means MUTUAL FUNDS ARE NOT LIKE FDs. Please understand the basics before jumping into products.

      Reply
  8. Sir, my investment horizon is one year, expected returns 9% ~ 10%. Lump sum investment of 5 lakhs. Suggest me a mutual fund for above requirements.

    Reply
    • Dear Prashanth,
      You are expecting bit higher return. I suggest you to stick to Liquid Funds.

      Reply
      • Thanks sir for the reply.

        Reply
  9. Hi Basavraj. For 54 EC , whom to approach for REC / NHAI bonds ( like bank, broker,etc ?) Also how do I pay least brokerage during purchase. Your detailing will help

    Reply
  10. Dear Sir
    If I want to start an SIP of 1000 per month with 15 years horizon for a child’s education. In which type of funds should I be putting my money in?

    Reply
  11. Hello,
    I have started investment in Jan 2018 in following for min 5 yrs :
    ADITYA BIRLA SL FRONTLINE EQUITY FUND(G)- Rs. 1000/Month
    SBI MAGNUM MULTI CAP FUND- Reg(G) -Rs. 1000/Months

    Now want to invest in HDFC Balanced Fund – Direct Plan or ICICI Prudential Equity & Debt Fund – Direct (Rs 2000/month

    Guide me : 1. Am I on the right track of investment ? 2. Which one balance fund should choose from above ?

    Is there any impact on HDFC Balance fund due to merger of ( HDFC Premier Multi Cap Fund AND HDFC Balanced Fund) should.

    Thanks

    Reply
    • Dear Daulat,
      Stay away from equity if your time horizon is JUST 5 YEARS.

      Reply
      • I will continue these mid cap and multi cap for fund for more than 7yrs.

        Could you Pls suggest on my query for balance fund.

        Thanks

        Reply
          • Should I have as me age is 33 yrs.
            If yes pls suggest.
            Thanks

            Reply
            • Dear Daulat,
              Your asset or fund selection in no way related to your age but related to your financial goals.

              Reply
          • Hahhaaaa

            What you mean.
            Please reply if you have specific.
            Thanks

            Reply
            • Dear Daulat,
              Your investment must be based on time horizon of the goal but not as per your age.

              Reply
    • Hi
      Could you please revert against my queries.
      Thanks

      Reply
  12. Sir, have Reliance Value Fund the old name was reliance regular savings (growth equity fund).

    I am holding this from last 9 years with 2,000 rupees every month. My goal was to create a wealth in 10 years for my kids education. But this fund has not given much return. Can you please help me sir. What should I do, I have 15% profit on this. SHould I stay or move to a new fund? Thank you very much.

    Reply
    • Dear Sudarshan,
      Only one fund? Where is the asset allocation? 15% return is bad for you?

      Reply
      • Thank you sir for the reply. You are a very good person. Two more funds are Birla sun life front line equity (3000 thousand from 9 years 18% return) and DSP black rock top 100 fund (3000 rupees from 9 years 11% return). This was invested for the goal of my kids 10 yrs back.

        I am not sure which fund to continue or any reason to buy a new scheme? My goal sir from 2018 is to have 30 lakh for my kids marriage. Can you please help me sir. thank you.

        Reply
        • Dear Sudarshan,
          For each goal, first set time horizon, then do asset allocation and then within asset invest in the funds. But I found that you are investing in a single fund with 100% into equity. This is a dangerous move.

          Reply
          • Sir, You mean to say that my three funds are in equity and has High Risk?

            I got the advice from an agent 9 yrs back. so I invested after some research. Do you advice to stay with these funds or withdraw the amount and invest in any NEW low risk funds? I have my goal of kid marriage of 30 lakh. What will be your advice? What should I do? Thank you again sir.

            Reply
            • Dear Sudarshan,
              First do the asset allocation based on your time horizon and then think of products within asset class.

              Reply
  13. Thanks for the advice, Basavaraj.

    Your site I had stumbled across while browsing for good mutual fund advice. And it has helped me a lot.
    I have started an account with Kuvera and begun investing in “direct”mutual funds keeping in mind the goal tenures.

    I’m already investing in Birla Sunlife Cash Plus Growth Direct. Will that be a good liquid fund to park 20 lacs for 3 months?

    I’m very grateful to you for your unbiased and correct advice.
    I’ve referred your site to my friends and relatives as the go-to site for financial advice.
    Thanks…

    Reply
    • Dear Abraham,
      Yes, you can continue that fund for immediate cash parking. Thanks for your kind words.

      Reply
  14. Hi,

    I have recieved a gift of 20 lacs from my father towards purchase of a flat and the money is resting in the savings account. The flat purchase would be only about 3 months from now.
    Is there a way to invest the money for the 3 month period safely?
    Can you suggest what to do?

    Reply
  15. I am 66 years old . I would like to invest about 50 Lakhs in mutual funds . I plan to invest for long term and after a year get in to monthly SWP at 9%. ( I will not be entirelydepending on this for my livelihood)
    1) How many funds should I have in my portfolio.
    2) Should it be all balanced funds or what % should be balanced funds
    3) I understand HDFC balanced fund which has a good track record is merging on June 1 with HDFC Premier muticap fund which has not been performing well . Does that mean on June 2 the NAV will drop in view of this . would that be a good time to enter. thanks

    Reply
      • I was told that considering my age and preference for moderate risk it is better I stick to balanced fund since in a 10 year time framework equity fund and balanced fund perform more or less the same .

        Reply
        • Dear Vishwanathan,
          Balanced Funds are best if your time horizon is 10 years. However, worst choice, you want to withdraw some amount regularly from such funds.

          Reply
          • What about a portfolio like below.will this increase the probablity of meeting my target better than all balanced funds ?

            Balanced fund – hdfc balanced fund
            large cap — kotak select focus
            small & med. — l&t emerging business fund
            diversified. — AB sun life advantage fund
            5th fund , diversified – l&t value fund or l&t business cycle fund , which one would you suggest and your views on the above for 10% swp after first year for 10 year holding .

            Reply
            • Dear Vishwanathan,
              How can you rely on consistent performance on equity funds and start with opt for SWP?

              Reply
        • Please advise where I should invest .

          Reply
          • Dear Vishwanathan,
            Hard to advise anything BLINDLY without knowing your full financial life.

            Reply
  16. Hello sir ,

    I have got the mail from HDFC that they are going to merge HDFC Balanced Fund and HDFC Premier Multi-cap Fund to HDFC Hybrid Equity Fund .By this they have significantly change the asset allocation .

    I am current investor in HDFC balance fund how do you suggest the current change in allocation will affect me ?

    This is the link with other details : http://files.hdfcfund.com/ImpDocs/17_HDFCPremierMultiCapFundHDFCBalancedFund.pdf

    Reply
  17. Hi Basu! I have around 10lakhs which I want to invest for regular monthly income. What do you suggest?

    Reply
    • Dear Poushali,
      May I know the usage of this regular monthly income?

      Reply
  18. My age is 53 now and I want to plan for retirement/create SWP . In which MF i should now invest?

    Reply
    • Bhase-Whether you created retirement corpus or about to create retirement corpus?

      Reply
  19. Hi
    I want to start investing in MFs and willing to make SIP of INR 20000/- Pm for 10 year. My goal is to buy house for my family. My age is 29 Years. My allocation would 70:30 (equity & debt).

    Please suggest some best portfolio to invest and achieve my goal.

    Reply
      • Please let me know your views on continuing with HDFC Prudence Fund- Dividend payout option or to move out, after restructuring as HDFC Balanced Advantage Fund. I need regular income, so what else funds are good to invest for regular income. I wish to invest in Balanced Funds only. Thanks

        Reply
        • Dear Vyas,
          Yes, better to move out from Prudence and stick to HDFC Balanced Fund.

          Reply
          • Thank you Sir. I have on my list Principal Balanced Fund, Reliance Hybrid Equity [ old name Regular Savings- Balanced Option ]. Are these good to invest proceedings of HDFC Prudence Fund, which I will get?

            Reply
            • Dear Vyas,
              Why not invest in 1-2 funds rather than ALL Balanced Funds?

              Reply
              • Thank you. Yes, that will be. Which ones are good for regular income. I understand that dividends are not guranteed and I can bear fluctuations also. Considering this, which are good funds. Please let me know. I am planning to invest tomorrow morning. Thanks

                Reply
                • Dear Vyas,
                  Without knowing for what purpose you need this regular income and without understanding your financial life, it is hard to say anything BLINDLY.

                  Reply
  20. Hi Basu Sir!

    I am 31 years old and have been constantly following your articles and tried to made some changes(not redeemed) to my portfolio.

    Earlier portfolio:
    ICICI Balanced Regular Growth – 1000/- monthly SIP (Now Stopped)
    Axis Long Term Equity Regular Growth – 1000/- monthly SIP (Now Stopped)

    Current portfolio:
    Axis Long Term Equity Direct G – 1000/- monthly SIP
    Aditya Birla Sunlife Tax Relief 96 Direct G – 1000/- monthly SIP
    HDFC Balanced Direct G – 1000/- monthly SIP
    ICICI Balanced Direct G – 1000/- monthly SIP

    So am I going the right way? I have a long horizon for investments (7 plus years) and also apart from the above portfolio, can I go for Multicap or Largecap (which ones)?

    Reply
    • Joydeep-What asset allocation you are following between debt and equity? How you shortlisted these funds?

      Reply
      • Following an asset allocation in the range of 30% debt and 70% equities. I do not have much experience in MFs. Shortlisted these funds primarily on the basis of self comparison & understanding of past performance, by going through various articles written by you and Value Research. I was also planning to start a SIP either in SBI Bluechip Fund Direct G or ICICI Value Discovery Direct G?
        According to you should I go for it? And should I make changes to my existing portfolio stated above? or you can recommend me a better portfolio.

        Reply
        • Joydeep-One large cap and one mid cap in equity in the ratio of 60:40 is enough for your 7 years goal. In Debt, you can use Ultra Short Term Debt Funds or Liquid Funds.

          Reply
  21. Hi Basu,

    I need to have funds for my retire ,present my age is 34, recently i have started investing following mutual funds as a SIP’s monthly 1k for each one .

    Franklin India Feeder – Franklin U S Opportunities Fund – Direct – Growth
    Franklin India Prima Plus – Direct – Growth
    Franklin India Smaller Companies Fund – Direct – Growth

    I have plan to choose two more debt funds (Totally i want to invest 2k per moth in funds)

    My Queries :

    1. Whatever i have selected funds are good are not
    2. Is this my idea is good means(60% equity and 40% debt)

    Could you please suggest me

    Reply
    • Chandu-What prompted you to select these funds? What is your time horizon of goal?

      Reply
      • This corpus for my retirement and time horizon is around 25 years.

        Is this good idea or not?

        Reply
        • Chandu-But why all funds within Franklin and how you selected these funds?

          Reply
          • My self only selected . Do you mean i need to chosen different companies?. Any way i have selected those .Any suggestions and please let me know best debt funds for SIP. Above Those Franklin funds i have seen in your article. That’s why i have selected.

            Is there anything i need to change right now ?

            Reply
  22. Hi Basavaraj,

    I am looking to build corpus for my flat maintenance fee of 30,000 per annum. Can you please suggest me some investment option to achieve this using equity or debt.

    Reply
  23. Hi Basu,

    The AMCs were supposed to take some action on MFs schemes as per new guidelines of SEBI. Do you have any information on it?

    Regards,
    Nicolas

    Reply
    • Nicolas-One by one following. Let us see the complete change. Then I will update the post.

      Reply
      • Thanks Basu. I believe except HDFC mostly all others have announced the changes.

        Reply
  24. I have five FD of Rs 2Llakh each giving quarterly interest and getting matured this month and next month.
    I need regular income.
    Which schemes I can invest in Mutual fund ?

    Reply
    • Ashish-NONE of the Mutual Funds will generate you fixed regular income.

      Reply
      • Lot of people have invested in balanced fund which give monthly income.
        Do you recommend FMP ( Fixed maturity plan which would give quarterly dividend ? )
        Also what about SWP option ?

        Reply
  25. Hi Basu what is the main difference between DIRECT or REGULAR while investing in such mutual funds, Please share comparison and which is better

    Reply
  26. sir,
    Why is that Principal Balanced fund (direct ) is not in the above list , its expense ratio is less that HDFC balance fund and gave returns more than the above funds , can i invest , do websites have biased approach towards AMC’s.

    Reply
    • Rahul-How long it is? What is the downside protection the fund has? What is the risk-adjusted return?

      Reply
      • Sir,
        21.31%, 14.68%,18.91% respective 1year ,3years , 5 years returns better than HDFC (14.37%,11.68%,20.21%) only difference is that ,it has got only less assets Rs1,060/-. Sir , I am not an expert just wanted to know why it was not in list , respect your knowledge and the way this site is managed . Regards.

        Reply
        • Rahul-How old is the fund? What is it’s 5 years and 10 years returns?

          Reply
  27. Hi,

    I am a India Resident staying outside India since last 3-4 years. I keep roaming around the world every couple of years. I have a some around 15L in FDs today. I need an optimum investment plan which will achieve me an objective of about 50L in next 3 years. Ofcourse, I am ready to pump in some more funds.

    I need a distributed investment plan with below attributes –

    1. Security First – Moderate or no risk
    2. Assured return
    3. Tax Benefit as Indian Resident and as NRI as I get qualified for the status.

    Please guide me in the same. Thanks!

    Reply
    • Amit-Rs.15 lakh to Rs.Rs.50 lakh in 3 years with SECURITY FIRST, ASSURED RETURN and TAX BENEFITS. God can save you!! If you find any such scheme or product then share with us also. I am eager to know this wonder of the world.

      Reply
      • Hi Basavaraj,

        I mentioned that I can regularly pump in money in this scheme say about 5-7lac per annum for next three years.

        I am sorry for my obscurity. However, I need basic investment guidance to achieve my fin goals if you can help with. Thanks!

        Reply
  28. I want to invest for 3 years to achieve 5lac RS goal. I was thinking balance fund would be best. What is your suggestion sir? Should I choose large cap mid cap n balance cap? Any suggestion. I am fine 10%return annually.

    Reply
    • Asif-I suggest you Liquid Funds or Ultra Short Term Debt Funds.

      Reply
  29. Hi ,

    I am considering starting an STP as I have certian fixed deposits which are maturing in next few months .
    Can you please help me with it…Should the Lumpsum be invested in the Fund of the same fund house in which i am ultimately going to hold say an Equity or Debt fund .

    Also Can you Suggest some good Euity fund for a time horizon of 8-10 years with Decent returns of say 18-20 % CAGR and moderate risk

    Reply
    • Harikamal-What is your need of setting STP? Why do you want to invest?

      Reply
      • Actually My Dad has been traditionally saving in form of Fixed Depositswhich i feel is not a tax efficient way of savings.Hence I am considering putting The FD maturity proceeds in a liquid or Short Term fund and set up an STP to an Equity or Balanced fund

        Reply
        • Harikamal-Whether you are investing to achieve your financial goals or to save tax?

          Reply
  30. Hi Basu,
    Currently I am investing 2000 monthly in Hdfc top 200 growth, should I continue investing in it or should I consider other like ICICI Prudential Focused Bluechip growth/Sbi Bluechip fund growth for long term investment horizon of 10 years.

    Thanks
    Nilesh

    Reply
      • Thanks Basu,
        I am also investing 1000 monthly in Sundaram select mid cap growth, should I increase amount in that ? Or should discontinue

        Thanks
        Nilesh

        Reply
  31. Hi. I have divided my financial investments into 3 timezones:less than 3 years, 5+/-2years and more than 10 years. The long term ones are for goals like retirement, child education etc and i have invested in debt/ equity instruments in 35:65 ratio( instruments like epf, ppf, nps equity mf). For short term of less than 3 years i am sticking to FDs. With regard to investments for intermediate goals both as lumpsum and sip, i am confused between short term , ultra short term, short term gilt and balanced funds. Which of these 4 classes is ideal.?

    Reply
      • Thanks very much sir

        Reply
  32. Hello Sir,

    My goal is for 10 to 15 years
    I am investing in HDFC Midcap Opp Fund(G) through HDFC site Direct Option. There is an option “Number of Installments”, where we can enter minimum 6 months.
    My question is how much months enter in this options ?

    Thanks
    Amit

    Reply
    • Amit-It is for how long you want to invest. It is purely left with you.

      Reply
  33. Dear Basavaraju, I have smart home loan going on and around 15 lacs accumulated in bank current account (these offset outstanding principal as long as I keep it there) , loan interest rate is 8.5%. Should I park this amount in a balanced fund instead for next 10 years?

    Thank you
    Samir

    Reply
      • An investment advisor, his focus was more on capital protection.

        Reply
        • Samir-True but do you think ONLY Balanced Funds are a right capital protector? Also in what sense they protect your capital?

          Reply
          • Yes, they are a good balance between large cap stability and mid cap growth. What do you think can be a good strategy with this accumulated money? Thanks

            Reply
            • Samir-I suggest you consider the balanced funds also like 100% equity funds. Do separate asset allocation for debt.

              Reply
              • Sure, any allocation % you want to suggest?

                Reply
  34. 2. ICICI PRUDENTIAL CORPORATE BOND FUND B GROWTH (OC) gave annualised return (-)14.02% in 10 years . means if u invest 1 Lakh in 2007 then its value in 2017 will be 22079 with a loss of 77921.

    Reply
    • Lalit-Do you know anything about Credit Rating, Modified Duration and Average Maturity of BOND FUNDS? If you don’t know, then first learn and then quote the return. If you are unable to understand the risk involved in each product or asset class, then it is YOUR PROBLEM but not the WHOLE WORLD’S PROBLEM. Also, first learn the basics of what is annualized return to IRR, XIRR or CAGR.

      Reply
      • Basu ji your reply shows your angerness rather accepting the facts that be it mutual funds, equities, real estate, gold or gold funds all sort of investments give negative returns in short term or long term. You may be qualified n certified person but don’t project yourself as know all personality . Hope you won’t mind n respond in a positive manner.

        Reply
        • Dear Anil,
          It is not anger but how people throw RISK in air and assume that they know everything. I never claimed myself that I KNOW EVERYTHING 🙂 Regarding investments and assets you mentioned, our primary goal should be how safely we reach goals rather than chase returns of the products or assets you mentioned.

          Reply
  35. Mutual funds which give negative returns in 10 years
    1. ICICI PRUDENTIAL CORPORATE BOND FUND GROWTH gave annualised return (-)14.17% in 10 years . means if u invest 1 Lakh in 2007 then its value in 2017 will be 21697 with a loss of 78303.

    Reply
    • Lalit-Funny that you are unable to understand what is BOND FUND and what is EQUITY FUND. First learn the basics, risk involved in each product or asset, then can we discuss? 🙂

      Reply
  36. SIR,
    IS SIP REALLY GOOD BECAUSE LESS UNITS AVAILABLE IN SUBSEQUENT MONTHS AND THE NAV GOES DOWN LESS THAN PURCHASE PRICE RESULTING INTO LOWER BALANCE THAN THE INVESTED AMOUNTS IN SUBSEQUENT MONTHS?

    Reply
    • RAvi-But sadly there is no such theory which proves that SIP is BEST. However, say SIP is the BEST CONVENIENT way to invest. Taking two data point and proving SIP is best is the SALES STRATEGY.

      Reply
  37. SIR,
    HOW IS ANNUALIZED RETURNS ON MUTUAL FUND CALCULATED FOR ONE TIME DEPOSIT? WHETHER ANNUALIZED RETURNS ON MUTUAL FUND IS
    CALCULATED CUMULATIVELY FOR THE INITIAL NAV OF UNITS PURCHASED AND THE SUM INVESTED INITIALLY OR ON THE PREVAILING NAV DURING COMMENCEMENT OF EVERY YEAR? KINDLY CLARIFY.

    Reply
  38. Hi Basavaraj. Since some months going through posts and they are valuable. My Goal is post 10 years and I have 3 Lac to invest with return expectation of 10%. So I have chosen hdfc balanced fund after going through your detailing in your different posts. Need your suggestion as to which way will be good, investing all money at one time or keeping money in debt fund and then doing Systematic transfer to the chosen balanced fund ? I have also gone through your detailing about Franklin debt fund. If I choose to invest there, then I won’t be able to do auto transfer to HDFC bala. Little confused. Pls suggest

    Reply
    • Dev-Treat balanced fund as pure equity fund. Hence, do the asset allocation of 30:70 between debt and equity. For debt use ultra short term and for equity one large cap and ond mid cap or one balanced fund also fine.

      Reply
      • Sure. Thanks

        Reply
  39. Dear Basu..

    Thank you for all the post. Would like to have your views on Cryptocurrency. What will be the best platform to buy it. Blogs on this will be very much appreciated as of today their are many person looking for this. But been misguided.

    Reply
    • Mayank-I never invests my single rupee in a product or asset which is not regulated in India. I am ready to miss the 50% or 100% returns for the sake of safety.

      Reply
      • Dear Basu,

        Well noted with your words. But words sake of safety is not understandable.

        Anyhow thanks for the reply. Well appreciated.

        Reply
        • Mayank-I am not predicting anything. But surely it is just an unregulated BUBBLE.

          Reply
  40. Sir,
    One year return for HDFC Balance Fund Growth is shown as 24.51% whereas for 10 years it is shown as 13.97% in the above table given by you . This is quite confusing. When a person can get 24.51% return for just 1 year investment and may get 245.10% return in 10 years if reinvested every year, why a person should invest for 10 years just for 13.97% return which on an average come to only 1.39% return per year.
    Can you kindly clarify?

    Reply
    • RAvi-BEST QUESTION!! One year return of 24.51% has the probability of NEGATIVE 24.51% in a year, whereas 13.97% return of 10 years will not be possible to give you NEGATIVE 13.97% return within a one year. If you don’t know these basics about how equity market volatility works, then better either you learn or start a small amount to experiment on your own.

      Reply
      • I too am working getting my basics right before investing. if i get 24% after one year, wouldn’t it be wise to re-sell and get the full 124% of the money and reinvest in some other MF which has a short term potential of similar 24%. Why the investment for 10 years?

        Reply
        • Reejish-Great!! May I know how you judge that SHORT TERM POTENTIAL OF EARNING 24% in a year 🙂 Assume that you withdraw from fund ABC and assumed that you again selected the same fund for your next year investment, then is it not the additional CIRCUS that withdraws and re-invest in the same fund rather than keeping the money in same fund? Even if you invest in the different fund, then do you think the market treat your fresh investment SEPARATELY and try to generate you 24% returns? First, correct your basics about compounding and how equity works.

          Reply
  41. I want to invest 10,000 per month for 10 years in SIP/mutual fund. Can you please suggest one based on this requirements below?

    My goal is for kids education. I can take medium risk and already investing in fd, ppf and VPF. In assets I have a family house and car. thank you for your reply.

    Reply
  42. Hi Sir,
    would request to please advise to choose LIC plan between LIC Endowment Plan-817 & New Jeevan Nidhi.
    I want to invest one time money from 3 Lac to 5 Lac for long terms (20-25 Yrs) so that i get some good money at the age of 55/60.

    also advise on Post office scheme for above investment. do you have any whatsapp group

    Thanks
    Rajesh Gupta-9805098156

    Reply
      • Sir- It mean ROI , as per LIC-Agent if i pay 5 Lac one time and take term-22years , then I can get Approx 22.80Lacs on Maturity. I have just calculate 6.9% interest on FD rate for 22 years it was almost same return.
        but benefit showing by LIC-Agent was Risk cover.

        So Pl advise.

        Reply
          • Sir,
            PL update on my query

            Reply
            • Rajesh-22 Yrs of investment and around 6% returns BEST for you, then go ahead.

              Reply
  43. Hello Sir,
    I am investing in Mutual fund through a financial advisor finedge. In future I want to invest more in SIP. which type of investment is better Direct plan or through advisor? As brokerage charges has been paid to finedge. does it make huge difference in total amount after long term may be 10 years

    Reply
    • Kumar-Before choosing regular or direct, first understand whether you can manage your own portfolio or not. If NOT, then go with an adviser who handhold you. If YES, then definitely choose DIRECT. Even you can use DIRECT with Fee-Only Planner also.

      Reply
  44. Dear Basavaraju garu,
    Thank you very much for very informative & unbiased article. All your articles are very useful & educative for people like me. Please comment on “Reliance RS balance fund”. Sir, please let us know how to get other performance rations like beta, capture ration etc and whether they are relevant.

    Reply
    • Rao-You can continue the fund. You can check Morningstar or Valueresearch portals for those metrics.

      Reply
      • Thank you very much sir.

        Reply
  45. Basu ji, I am going to buy a new car in 2023 after 5 years. I am thinking to start a sip for that goal in a balanced fund equity oriented. Is this decision correct?

    Reply
  46. Some of my goals need monthly investment amount less than Rs 5000. In this smaller SIP amount, can i choose single balanced fund instead of Equity funds ( 1 Large cap, 1 Mid cap) and debt funds( 1 ust fund).

    My point is , No need to maintain separate funds for this small SIP amount and Auto re balancing is additional gift.

    Please share your thoughts.

    Reply
    • Devan-Hard to guide as I don’t the time horizon of the goal.

      Reply
      • Sorry . The time horizon of three goals are 17, 20 and 24 years from Now.

        Reply
          • Thanks Basu,

            One fund is enough or Shall i have 2 funds to each goal.

            Reply
              • Basu,

                I have query regarding Robo advisory tool, Following are my requirements

                1. Financial planning for my goals & Funds recommendations
                2. Asset allocation and Re-balancing Portfolio based on the performance of funds.
                3. Email alerts for Re-balancing at least once a year.
                4. Mapping of existing of funds to goals .

                After i have gone through your post, Short listed Kuvera and Invezta.
                There is no financial planning in Invezta , But Kuvera supports it.

                Am looking for your suggestions , Is there any other points to be included to short list the Robo portal.

                Reply
                  • May i know the reason why you avoid Robo advisory.

                    To me , If we select funds on our own, But to manage portfolio like tracking and re-balancing based on asset allocation purpose, we can use the Robo portal.

                    Reply
                    • Devan-Tracking and re-balancing you can do on your own but why robo-advisery?

                    • My understanding is , maintaining different portfolios/ Single portfolio for all the goals and re-balance based on the Market situation is tedious process. Robo algorithm will do better than me.

                    • Devan-I am not saying it is easy. However, robo advisory follows the fixed set or pre-defined rules, which may not understand the human behavior finance.

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