Add Stability to Your Portfolio by Investing in a Balanced Fund |
Posted: January 5, 2018 |
A Brief Introduction Balanced Funds are basically a hybrid product, involving both equity and debt elements, which makes them a better investment avenue in a bullish market phase. The equity portion that generally forms 65% or more of the total corpus of this category allows to grab the tax benefits associated with equity funds, where the investments held for a year or more become immune to tax. In addition to this, the debt portion controls the gravity of the fund’s fall by acting as a shield in the market correction period. Thanks to this multi-flavoured nature of the Balanced Mutual Funds that they are way less volatile than the pure equity instruments. By using the best online financial services provided at MySIPonline, you can get hold of every nitty-gritty associated with this fund category. The Summary of Standard Deviation In order to support the theory of Balanced Mutual Funds being the better option in situations of scrambling market, we shall have a gander at the standard deviation of the top-performing mutual funds, which involves studying the degree of volatility prevailing in the funds in comparison to their past average deviation. By reviewing the measure of standard deviation, you will be easily able to draw a clear picture of the intensity with which the fund’s return can vary in the future as compared to the average returns that the funds have coughed up in the past. For instance, if a fund has provided average returns of say 10% and its standard deviation is 2%, then it means that the fund’s return can land anywhere between 8% to 12%. The Risk-Return Matrix Balanced Funds are known for spilling returns which are similar to that provided by Large-Cap Funds. If you analyze the last one-year performance of these schemes, you will be amazed to know that they have yielded returns that averaged to a good number of about 15 per cent. As explained earlier through the standard deviation table, the risk factor involved in these funds is way less than the Large Caps, which again is a plus point for this category. Apart from having a good understanding of the aforementioned information, you shall also have a clear distinction of your investment objectives, which is the reason why you choose to invest in the best Balanced Mutual Funds. Your ambitions could be as simple as planning a retirement or saving for buying a house, or as complex as generating wealth for turning your business ideas into reality. This will enable you to decide upon the magnitude of risk that you can face and will give a clear idea of your investment time horizon. Getting started with MySIPonline will be the most intelligent choice that you could make, as you can get all your financial queries resolved at a single place.
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