Balanced funds are hybrid mutual funds that invest in equity and debt instruments, and usually balanced equity funds invest no more than 35% of their money in debt instruments.
I created a list of the best balanced funds in India in March 2011, and I thought of updating that list as it is close to 2 years since it was created last.
I’m not a big fan of these type of lists because no matter how much you say that past performance is not an indicator of future performance, at the end of the day, if you’re making these type of lists then that shows that you do give a lot of weight to how the fund has behaved in a certain manner.
But I do feel that among all the factors I have seen to evaluate mutual funds, past performance is something that everyone relies and does help you to a certain extent.
For example, in my last list almost 2 years ago there were 10 funds, and based on the best 5 year performance, 8 of those funds feature in the list today as well.
Was there any way to know which 2 would drop out? No, absolutely not. So there is some utility but only so much.
With that said, here is the list of the best balanced funds ordered according to their five year performance.
| Fund | 1 Year Return | 3 Year Return | 5 Year Return |
|---|---|---|---|
| HDFC Children Gift Investment | 12.07% | 15.34% | 11.87% |
| Reliance Regular Savings Balanced | 17.46% | 9.75% | 10.88% |
| HDFC Balanced | 9.76% | 11.72% | 10.85% |
| HDFC Prudence | 10.21% | 10.99% | 10.64% |
| Canara Robeco Balance | 14.11% | 10.31% | 8.83% |
| Birla Sun Life 95 | 12.88% | 9.91% | 8.44% |
| ICICI Prudential Equity Volatility Advantage | 20.67% | 12.91% | 8.22% |
| Tata Balanced | 16.14% | 10.30% | 7.96% |
| UTI CCP Advantage | 9.56% | 6.25% | 7.85% |
| DSPBR Balanced | 8.20% | 7.30% | 7.18% |
The two funds that were present in the earlier list but have dropped down now:
| FT India Balanced | 12.41% | 8.67% | 5.90% |
| Principal Conservative Growth | 17.74% | 5.73% | 3.99% |
Hi Manshu,
I’m investing in following MFs through SIPs for 5 yrs time frame since 2 yrs. Now I want to know whether any change is needed in my portfolio as per fund’s performances or not.
ICICI Pru Focused BlueChip Eq Fund-Reg(G 1500/- pm
UTI Opportunities Fund(G) 1000/- pm
IDFC Premier Equity Fund-Reg(G) 2000/- pm
SBI Emerging Businesses Fund-Reg(G) 1000/- pm
HDFC Equity Fund(G) 1000/- pm
HDFC Top 200 Fund(G) 1000/- pm
Regards,
Samir Nigam
One can also consider investing in SBI Magnum Balanced fund which has shown good performance over the past 1, 1 1/2 years. The fund is managed by R Srinivasan who also manages SBI Emerging Business fund a top mid cap and small cap fund. R Srinivasan is a good fund manager.
Regards
– Kapil Visht
Just clarifying. So… When it’s equity, ratings hardly matter – because either way it’s risky. I must only be bothered about the fund performance, consistency, and my intention behind the investment choice. That right? 🙂
Yes, you are right.
Thanks, Manshu! 🙂
Hi, Manshu!
I just wanted to know if it is okay to invest in a scheme that is not rated by CRISIL, if it is from a reputed fund house?
Hi Anusha,
Do you mean rating by CRISIL in particular or rating by any credit rating agency? Normally, debt issuers are required by law to get their offerings rated, and I would imagine that they have at least some rating. It doesn’t really matter if the rating is from CRISIL or not. Which specific scheme is this?
SBI FMCG Fund. I see that usually, the risky ones – like sectoral funds are not rated… And I thought CRISIL is the standard analytical board that rates schemes; could you please clarify? Thanks.
This is an equity fund Anusha, and you can’t really rely so much on ratings in this case, in fact a ratings won’t help at all. In this case, SBI has launched a fund that will invest in shares of companies in the FMCG sector, and if those companies do well then this fund will do well, and if those companies don’t do well, then this fund won’t do well either.
You should buy this fund if you wanted to invest in FMCG companies in India, that’s pretty much it. Does this make sense, do you have any more questions?
HDFC Top 200 Fund (G) -very nice fund as well. Look at the 1 year performance, and stock mix.
That’s not a balanced fund.
Would like to read more on pros and cons of balanced funds
The benefit of owning a balanced fund is that it has about 35% debt so when the market falls badly, the balanced funds have a little more cushion and don’t crash as badly.
The disadvantage is that when the market rises, the fixed income portion won’t rise because of the market rise.
thanks Anand.
HDFC Children Gift Investment can be bought only in the name of a minor. Investments can be made until the child turns 18.
Anand,
Thanks for mentioning that – I had no idea they had such a condition. I missed it while going through their documents. Thanks again for pointing it out.
Thanks Manshu.
Excellent info given very precisely.
Is HDFC Children Gift Investment MF a normal Balanced fund for everyone or specific fOr giving gift to children?
can you also rank them? most people buy only 1-2 Balanced MF in their portfolio. so which one or two Rank higher?
Thanks
Anyone can buy it, they just named it that way.
I don’t know of a way to rank any of these any further really.
If most MF achieve only 10% isn’t safer to park ones funds in FD which give 9 – 12 % !!!
Hi Dr. Mohan,
1. Interest on FD is taxable so when you get 9 pct on FD , considering your Tax rate at 30 pct , you would actually get 6.3 % return. In case, of Mutual Funds units held for more then 1 year, it is tax-free. Hence you end up making 2-3 % extra each year.
2. If the net saving of 2-3% looks too small, in longer term it gives really big difference. For example , 1 lac invested today at a rate of 6.5 % would become 1.9 Lac after 10 years While 1 lac inveted today at a rate of 9% would become 2.43 Lac.
Just to add to that, there is no guarantee that most MFs will achieve 10% or so, the number can be negative as well. You have to be cognizant of that while investing in mutual funds that invest in shares.