Principal Balanced Fund

Principal Balanced Fund is an equity oriented hybrid fund. It is being managed by Mr P.V.K Mohan. The scheme seeks long-term capital appreciation and current income from a balanced portfolio of equity and debt securities. New investors may skip this one for now. If you have already invested in this scheme, exit now to invest in a better performing fund.

Where does Principal Balanced Fund invest your money?

Principal 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 25% exposure to debt. Its equity portion is multi cap oriented which means most of your money will be invested in stocks of large, medium sized and small sized companies. Principal Balanced fund has 65.22% exposure to large sized companies, 24.17% exposure to mid sized companies and 10.61% exposure to small sized companies.

Its debt portion has allocation in corporate debentures and government securities. It currently holds close to 10% 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 Principal Balanced Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched in Jan 2000, your value of investments would be around Rs 3.35 lakhs. If you had invested Rs 1 lakh for 5 years, your value of investments would be around Rs 1.23 lakhs. The fund has been 4% returns for those who have stayed invested for 5 years. 

Assume you had invested Rs. 10,000 every month in Principal Balanced Fund through SIP for 5 years today you would have around Rs 7.5 lakhs.

Our recommendation for fresh investment
Not Recommended
Our recommendation for existing investment
Not Recommended
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 No exit load applies for units withdrawn post one year.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 Principal Balanced Fund is 2.68%. 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?

The returns in a mutual fund are absolutely tax free, provided you do not withdraw within 1 year. 

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