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I am investing in HDFC Balanced Fund. Should I invest in one more balanced fund to diversify?

There are a lot of good balanced funds available. Should one invest in only one of them or diversify across multiple balanced funds. I am currently invested in HDFC balanced fund.

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HDFC Balanced Fund is more than 10 years old and is consistently performing better than its benchmarks.

HDFC Balanced Fund is an equity oriented balanced fund where majority of its investments have been made in large cap funds.

Few key points about this fund are:

·     Its an equity oriented fund with 70% investments in equity

·     Out of the equity, majority of the asset allocation has been in large cap fund.

·     Fund has made investments in different sectors with maximum allocation in Financial Services.

·     Debt investments have majorly been in Sovereign Bonds and Financial Services sector.

·     Risk is higher compared to benchmark

·     Fund is more than 10 years old

·     AUM is more than 10000 crores. Returns tend to o low once AUM exceeds certain amount.

HDFC Balanced Fund is a great fund to invest in. Its top holdings include HDFC Bank Ltd, ITC Ltd, Infosys Ltd, Larsen & Toubro Ltd etc.

If the investor has more funds to invest and he intends to diversify, then he/she can definitely look to invest in Balanced Fund. Balanced Funds are preferred over other funds because these funds have a diversified portfolio of debt and equity and suits the needs of the investors, since here the risk gets minimized because of the involvement of debt element as well.

Various other Balanced Funds can be invested in depending upon its asset allocation among debt and equity. Also importance should be given to its holdings while considering the options of investing in Balanced Funds.

Few Balanced Funds are:

Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.
Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, investment goal, time frame, risk and reward balance and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs.
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