HDFC Balanced Fund

HDFC Balanced fund is one of the best balanced mutual funds in the country. This fund is managed by an expert manager Chirag Setalvad. The fund has consistently outperformed the average returns of funds from its category. This is a good fund to hold on to for achieving your goals.

Where does HDFC Balanced Fund invest your money?

HDFC Balanced fund is a balanced fund which invests your money in both equity securities and debt securities. It has more than 66% exposure to equity and 32% exposure to debt. Its equity portion has mid cap bias which means most of your money will be invested in stocks of medium sized and small sized companies. HDFC Balanced fund has 38.87% exposure to mid sized companies, 34.56% exposure to large size companies and 24.27% exposure to small sized companies.

Its debt portion has allocation in corporate debentures and government securities. It currently holds close to 1% of its assets in cash and equivalents such as T-bills, banker’s acceptance and money market instruments.

Suitable for what?

The following needs if occurring between 3 and 5 years:

  • Child's education
  • Marriage
  • Home Purchase
 
Not suitable for what?
  • Long term needs
  • Creation of wealth
How has HDFC Balanced Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched in Sep 2000, your value of investments would be around Rs 6.22 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.69 lakhs. The performance has been better than or similar to other equity oriented hybrid mutual funds. The fund has been giving at around 11.16% every year for those who stayed invested in the last 5 years.

Assume you had invested Rs 10,000 every month in HDFC Balanced fund through SIP since the last five years you would have around Rs 8.48 lakhs.

How will HDFC Balanced Fund perform in the future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 8% then the leading companies tend to do well. When the companies do well their stock prices follow their performance. So if you expect the economy to grow at 8% then you can expect top performing equity mutual funds to give you returns in excess of 12%. Debt papers are expected to give anywhere between 0.5%-3% higher returns than Fixed Deposits.

How much to invest?

Minimum one time investment is Rs 5000 and minimum SIP is Rs 500 per month. You can make HDFC Balanced Fund as a part of your portfolio that is focused to achieve any goals expected between 3 and 5 years.

Our recommendation for fresh investment
Recommended
Our recommendation for existing investment
Recommended
When to enter?

Now! There is no good time to invest rather than now. Do not try to time the market and especially so if it is an SIP. Do not follow news channel and other experts to know the right time to invest. In the long run it does not matter. Mutual fund is unlike a stock where you are looking at the right price. This job will be done by the mutual fund scheme manager. If you have planned your investments and decided on the amount you want to invest do not think further, just go ahead.

When to exit?

Withdraw when your goals are close to achievement. Do not remove the money when the markets go up or down. Do not panic. Stick to your goals.

How frequently you need to monitor the performance?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a year. Too much attention is not good.

What are the charges applicable?

A onetime fee of Rs 100 is charged on investments over Rs 10,000 made through distributors. If you are a first time investor in mutual funds an additional Rs 50 is charged to cover KYC expenses. This is deducted from your investment and can be skipped if you buy directly from the mutual fund via their website or offices.

If units are sold within a year an exit load of 1% is deducted from your total returns. No exit load applies for units withdrawn post one year. Expense ratio of HDFC Balanced fund is 2.39%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.

What are the tax implications?

Returns on equity oriented hybrid funds are absolutely tax-free provided you do not withdraw within a year of buying the units. HDFC Balanced fund does not qualify for sec 80C ELSS benefits.

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