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Market volatility has a different meaning for different investors. The ones who have a long-term perspective and can bear high-risk on their investments take it in a positive manner as it leads to creating great returns when the market showcases high-rising trends. On the flip side, the investors having conservative or moderate risk appetite find volatility as a negative factor which affects their investment values in when the market falls.
Mutual funds are subject to market risk, and this is the reason why many investors stay away from them. But, the balanced fund provides a solution to such investors, and if you want to grow your money with the growing mutual fund industry without bearing high risk, then the balanced funds must be considered for your portfolio. Let’s understand what it provides.
Balanced Mutual Funds - Meaning Among the three broad categories of the mutual fund plans, the balanced funds are those which invest in the equity and debt instruments on a simultaneous basis. We all are well aware of the facts that equity securities are responsible for providing capital growth as they tend to generate a huge wealth over a period of time. On the flip side, the debt instruments are responsible for providing a regular income in the form of interest on bonds or debentures.
The best balanced funds being a combination of two help the investors in gaining the dual advantage of capital growth and regular income simultaneously. The invested capital in these funds is bifurcated on a proportionate basis as per the objective of the scheme with the help of which the investors gain greater returns.
Balanced Funds - Beneficial for the First-Time Investors All the beginners in the investment world are risk-averse in nature. They have the prime objective of safeguarding their capital than earning returns. Apart from the risk related to losing the invested money, the factors like market volatility also threaten them. Thus, they wish to make a safe investing in the schemes which provide good growth while offering a cushion in the volatile markets. The best balanced mutual fund provides the same benefit to the investors.
The investors who can bear considerable risk on their investments may opt for the equity-oriented balanced scheme where major funds are allocated in the equities; while those having below-average risk profile can go with the debt-oriented balanced funds. In both the cases, the investors earn safe returns due to adequate diversification to minimise the risk exposure and earn higher profits over time.
So with this, you can understand the importance of the balanced mutual funds for the beginning investors. If you are among those and wish to take advantage of the best mutual fund schemes in India, then you must have such plans in your portfolio.
Investing has now become even more simplified with the online investment solutions provided by various portals like MySIPonline. It has a wide range of tools and best recommendations for the investors to help them opt for the right plan for their portfolio. You must get associated with them to avail the advantage of simplified investments in the most convenient manner.