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Best Balanced Funds That Yield High Returns

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Created on
January 4, 2023


What’s Inside

If you want to diversify your investment portfolio without cramming in too many investment options, the best balanced funds in the market can help you attain this goal. There are many mutual funds in this category, and to identify the best balanced fund in India for your portfolio, you need to figure out what you expect from your investment.

Some investors consider it ideal if the mutual fund helps preserve their capital and offers fixed and reliable returns. Others may prefer mutual funds that are more aggressive in nature and offer high returns. Balanced funds give you the best of both worlds. 

Let’s take a closer look at what they are and discover the top balanced mutual funds based on the returns they offer.

What Are Balanced Mutual Funds?

Balanced funds are mutual funds that invest in different asset classes, such as equity stocks, bonds, and other debt instruments, and occasionally, money market instruments. This makes them a sub-category of hybrid funds. 

The ratio of equity and debt in a balanced fund is typically well-balanced (hence the name). The equity component can range from 40% to 60%, with the rest of the portfolio occupied by debt instruments. Because of this unique combination of debt and equity, the best balanced funds give investors a healthy mix of capital appreciation and safe returns. 

If you are looking for an investment option that can help you with your goal of wealth creation while also limiting the overall risk, balanced funds may be the answer. You can also benefit from the diversification it brings in. You can diversify into equity and debt by choosing just this single investment vehicle. Even within these broad asset classes, you can diversify into various sub-classes across industries and market capitalisations. 

What Factors Affect the Returns from Balanced Funds?

The returns from balanced funds depend on a number of factors. Some of the most common influential forces are listed below. 

Performance of the Individual Assets

Each mutual fund is essentially a basket of assets, and a balanced fund is no different. So, if the assets that the fund invests in perform well, the returns from the balanced fund itself will also be affected positively. The vice-versa is also true.

Fund Management

A good fund management team knows where to invest and when to rebalance. So, the skill and experience of the fund manager or the team in charge of this role is extremely crucial in determining the returns you can expect from your balanced fund. 

Expense Ratio 

There are many expenses that a fund house incurs to administer and manage the fund on a day-to-day basis. The expense ratio measures the cost of managing a fund. A higher expense ratio invariably brings down the overall net returns from your mutual fund.

Broad Economic Forces

Apart from the fund-specific factors outlined above, various broad-market forces also affect the returns from your balanced fund. The policies of the government, any socio-political developments, and other national and international developments are crucial here. 

Best Balanced Funds That Offer High Returns

If you are looking for the top balanced mutual funds in terms of the returns they offer, there are many options that you can choose from. Here is a list of the best balanced funds that yield high returns.

Summing Up

Now that you have a fair idea of the  best balanced funds in India for your portfolio, in terms of the returns offered, you can go about choosing some funds to invest in this category. However, remember that past performance is no guarantee of future performance. So, while historical returns may be one of the factors to consider, it is by no means the only aspect you need to account for.

To truly build a solid portfolio with balanced funds, look into the asset portfolio, the skills and the historical record of the fund manager, and how well the fund’s objectives align with your financial goals. 

Frequently Asked Questions

1. Which balanced fund is best?

The best balanced mutual fund is one that aligns with your financial goals and your risk profile. For instance, if you are a more conservative investor, you may want to look for a fund that offers more safety in returns. On the other hand, if you want to invest for a medium-term goal, a balanced fund with a horizon of 3 to 5 years may be ideal. 

In this manner, you need to assess the features of the funds available and check if they match your financial objectives before determining which is the best for your portfolio. 

2. Which is the best balanced mutual fund in India?

There is no single fund that is the best in this category. The definition of the best balanced fund can vary from investor to investor. However, if you are looking for balanced funds that offer high returns, some of the best choices in this category include the following -

  • DSP Equity & Bond (Direct, Growth)
  • Quant Absolute Fund (Direct, Growth)
  • HDFC Retirement Savings Fund - Hybrid Equity Plan (Direct, Growth)
  • HDFC Hybrid Equity Fund (Direct Plan, Growth)
  • Tata Retirement Savings Fund Moderate Plan (Direct, Growth)

3. Are balanced funds a good investment?

Yes, balanced funds can be excellent investments if they are aligned with your financial targets. They give you the benefit of capital appreciation from the equity component while simultaneously reducing the overall risk with the debt component. In addition, the best balanced funds in India allow you to diversify your portfolio with just a single investment.

4. How to invest in balanced mutual funds online?

To invest in balanced mutual funds online:

  1. Choose a reputable online brokerage platform or investment website that offers access to mutual funds.
  2. Create an account on the chosen platform, providing necessary personal and financial information.
  3. Search for balanced mutual funds, review their performance, expense ratios, and investment objectives, then proceed to invest by following the platform's instructions for purchasing the fund(s) of your choice.

5. Are balanced funds good for the long-term?

Yes, balanced funds can be a good option for long-term investors seeking a diversified portfolio with a moderate risk profile. These funds typically hold a mix of stocks and bonds, which can help provide growth potential and stability over time. However, individual financial goals and risk tolerance should be considered before making any investment decisions.


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.
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