In this video, we will explain to you the basics of balanced mutual funds or balanced funds
Edited Highlights
0:01 In this video, we will explain to you the basics of balanced mutual funds or balanced funds
1:28 In balanced funds offered by mutual fund companies, you balance between equity and debt
1:36 There are equity funds and debt funds. In equity funds, there is more risk than debt funds as most of the money is invested in stocks
1:44 In case of debt funds where the investments are debt, the returns are relatively lower than equity funds
1:51 The debt fund investments are in relatively lower risk investments such as bonds and debentures
1:54 In hybrid funds, some portion is invested in equities and some in debt
2:05 The proportion of equity and debt could differ
2:24 This is useful for investors since the risk is reduced somewhat compared to an equity fund
2:50 In a balanced fund, you get the long term upside of equity and relatively stability of debt investments, just in case equity markets aren't doing well
3:14 There could be equity-oriented balanced funds and debt-oriented balanced funds
3:20 In equity-oriented balanced funds, majority of the investments will be equities and in debt-oriented balanced funds, majority of the investments will be in debt
3:38 In equity-oriented balanced funds, according to SEBI and tax laws is that the equity exposure needs to be more than 65%
3:50 In such a case, it is treated as an equity fund especially for taxation
3:57 If the equity portion is less than 65%, it would be treated as a debt fund
