0 hidden charges. 0 forex

Balanced Mutual Fund: Definition and Overview

Reviewed by
Created on
April 25, 2023


What’s Inside

If you have been investing for a while, you may have come across hybrid or balanced funds. These funds have a debt and equity component at a particular ratio. Balanced mutual funds are ideal if your risk-taking appetite is low and you need decent returns. Unlike standard mutual funds, balanced funds have lower risks. So, you can gain debt and equity investment exposure without worries. You’ll get the support of a fund manager to know how to check mutual fund balance and other related details.

What are Balanced Mutual Funds?

Balance Mutual Funds are also called hybrid funds, as they enable you to diversify your portfolio. You can safely invest in equity and debt asset classes while managing risks successfully. Usually, these funds are a combination of stocks and bonds.

Investing in stocks primarily aims to optimise earnings and capital appreciation. You'll invest a fixed amount into the associated acid classes within a specified maximum and minimum limit. So, you set yourself up for excellent returns from both debt and equity.

Balanced fund categories

Equity-oriented balanced fund

This fund invests 65% of its corpus in equity-related securities. The rest is invested in debt or money market options.

Debt-oriented balanced fund

65% of this fund's corpus goes into debt securities, which include bonds, debentures and treasury bills. According to the market conditions, you can invest 60% in stocks and 40% in debt or vice versa. So, a balanced mutual fund offers great flexibility and convenience.

How to Invest In Balanced Mutual Funds?

After understanding what a balanced fund mutual fund is, you can dive into the investment process. The steps are the same as any standard mutual fund investment.

  • Create an account with an online broker or asset management company
  • Enter personal information and complete the KYC process
  • Based on your financial objectives, select funds to invest in
  • Transfer your desired amount
  • Choose the lumpsum or SIP payment option
  • Complete any bank-related formalities

If there are any problems during the process, contact the associated professionals for help. However, always select the investment amount according to your financial condition.

Advantages of Investing In Balanced Mutual Funds

A balanced mutual fund lets you plan your investments strategically by delving into debt and equities. For instance, you can shift your investments to equity if the debt market is too volatile.

Other benefits of investing in balanced funds include the following -

  • Risk reduction and portfolio diversification
  • The equity component fetches good returns, and the debt component stabilises income.
  • Can help in developing any emergency fund for economic inflation
  • Equity-oriented funds offer tax-free capital gains for investments over 1 year


Before finalising a balanced mutual fund, check its past performance and the company offering it. This will give you a brief idea about the expected returns. If you are an inexperienced investor, consult a fund manager for handling these investments. The manager will utilise knowledge and expertise to make smart investment decisions on your behalf. Fi offers a wide range of over 800 direct Mutual Funds (including Balanced Funds) with a user-friendly interface, catering to novice and seasoned investors. These Mutual Fund investments are commission-free and backed by epiFi Wealth, a SEBI-registered investment advisor, ensuring 100% security.

To simplify the investment process, Fi allows you to invest in Mutual Funds on a daily, weekly, or monthly basis using automatic payments or Systematic Investment Plans (SIPs) that can be created with just one screen tap. Additionally, Fi offers complete flexibility with no penalties for missed payments, making it easy to manage your investment in Balanced Mutual Funds — whenever the market fluctuates.

Frequently Asked Questions

1. What Is The Main Objective Of a Balanced Unit Trust Fund?

Balanced unit trust funds or balanced mutual funds improve portfolio diversification, reduce risks and help manage finances.

2. What Is An Example Of A Balanced Fund?

Popular balanced funds include HDFC Balanced Advantage Fund and HDFC Hybrid Equity Fund. These funds can comprise 35% bonds and 65% stock investments.


Investment and securities are subject to market risks. Please read all the related documents carefully before investing. The contents of this article are for informational purposes only, and not to be taken as a recommendation to buy or sell securities, mutual funds, or any other financial products.
Share this article
Copied Link!
Balanced Mutual Fund: Definition and Overview


View similar articles in
Get the Fi app