Investment in HDFC Balanced Fund – The Out of the Box Life Decision

Mutual Fund investments have become a new resort to earn good income with calculated risk exposure, owing to the big fund houses launching schemes that are attuned to the needs of the discrete investors and managing them to the best of their interest. Out of all the products available in the fiscal industry, equity schemes tend to be riskier as they primarily invest in stocks which are aggressive, which is actually the cost of earning higher returns. However, investing in balanced funds, particularly in HDFC Balanced Fund, can be the perfect way of dodging the risks to a great extent and still maintain the same rate of smooth income.

Actually, balanced funds involve a smart bifurcation of the invested income into equity and debt instruments, thus incorporating both the flavours of high income generation due to presence of equity factor and stability in the portfolio due to allocation into debt products. This is why these schemes have gained immense popularity in the recent past, as evident from the remarkable reception given by the investor mass and the performance streak that they have attained overtime. Through this piece of information, we are going to learn some interesting facts about the Balanced Fund Scheme of HDFC and understand how it can add value to your financial strength.

HDFC Balanced Mutual Fund – The Preface
HDFC Balanced Fund Growth Plan was launched 15 years ago on 11th September, 2000. Since day one till today, it has been a marvellous journey for this fund as it has effectively achieved the power of not only surviving, but thriving in the market as evident from the shining track record of the returns that it has yielded, the investors it has been able to pull and the large corpus flourishing under its watch. As of now, the fund manages about Rs. 19,169 crore of the investors’ money, an unusually high figure for a single fund to manage.

HDFC Balanced Fund – The Investment Philosophy
The 37-year old fund manager of the HDFC Balanced Fund Portfolio, Mr Chirag Setalvad, doesn’t believe in primitive methods of creating wealth which certainly can’t work in the highly advanced and rapidly expanding mutual fund industry. Instead, he follows a strategy that works best for the funds in the long term, which involves sticking to the stocks of those companies whose businesses are within the approach and understanding of the fund manager team, and which are capable of beating the benchmark if incorporated in the portfolio.

Advantages of Investing with HDFC Balanced Mutual Fund
Generally, people tend to drift away from equity investments owing to the relatively larger risk factor associated with them, although the returns they reap in the long run are quite lucrative and the highest when compared to other categories. Thus, to bestow the benefits of both worlds – security from high risk exposure and steady generation of high income – balanced funds were constructed, so that the investors could be more confident about their investment decisions and live care-free. Below are mentioned some of the major advantages of investing in the best schemes of balanced mutual funds out of which, HDFC Balanced Fund is amongst those who top the chart: -

• Diversification :
  Diversification simply means splitting your wealth into various mutual fund products and not just relying on one or two schemes. The result is quite favourable as it helps to reduce the overall risk of the portfolio and magnify the rate of returns, because if any of the schemes involved in the portfolio doesn’t perform well, then the overall return factor will not be damaged to a great extent as other schemes would have compensated with their high performance.
• Rebalancing :
  The balanced fund of HDFC involves minimum incorporation of equity and related instruments in the portfolio, and the remaining 35% is allocated to debt instruments. This is the general equation of allocation which is normally followed by the fund managers. However, this ratio may be changed depending upon the market twists and turns. For instance, if equity is giving high returns, then the fund managers will increase the exposure in equity instruments and simultaneously reduce the debt exposure.

With so many products crawling in the industry every day, it has become relatively difficult to choose the right product than before. However, you can dodge this difficulty quite easily if you choose to invest in the best mutual fund products, such as HDFC Balanced Mutual Fund, that have already been proved remarkably rewarding for the investors.

This article will help the reader to understand the advantages of investing in HDFC Balanced Fund.