What are equity oriented balanced funds?

There are two types of balanced funds- Equity oriented balanced funds and debt oriented balanced funds.

Equity oriented balanced funds are funds which invest majority of their corpus in equity while the remaining is invested in debt instruments. These funds offer stable returns in the long run by overcoming the volatility. The aim of equity oriented balanced funds is to achieve the safety of debt and the returns of equity.

Advantages of equity oriented balanced funds are:

• Lower risk
• Long term returns
• Stability
• Equity component is tax free if held longer than 1 year

Balanced funds are investment instrument, where an asset management company invest the money gather into both debt and equity. These are broadly of two types, equity oriented balanced funds and debt oriented balanced funds.

Equity oriented balanced funds are balanced funds where major portion of fund portfolio consists of equities, at least 65%, and rest in debts. Aim here is to minimize risk on investment.

Both equity oriented balanced funds and equity oriented hybrid funds are same thing, just differ in naming.

Advantages of equity oriented balanced funds:

• Highly diversified funds
• Low volatility and risk as compared to investing in investing in equity fund alone
• Tax benefits like equity funds
• Give more return on investment then debt oriented balanced funds.

Example of popular equity oriented balanced funds are:

• HDFC Retirement Savings Fund - Hybrid - Equity Plan – Regular
• Reliance Regular Savings Fund
• ICICI Prudential Balanced

These are diversified mutual funds having perfect balance between risk and returns on investment, and are most popular mutual funds these days.

Happy Investing!

Equity oriented balanced funds are those funds in which capital is predominantly invested in equity market. The portfolio of these funds typically consists of at least 65 % equity funds and the remaining capital is invested in debt funds to minimise risk. Yes equity oriented hybrid fund and equity oriented balanced funds are the same thing.

• Part of the money is invested in debt securities, which are safer investments as compared to equity funds. The returns are also lower in case of debt securities as compared to equity funds. The investment is done to limit the risk of the portfolio.
• Equity oriented balanced funds are ideal for investors who want to invest in stock market but at the same time is risk averse.

Thus in these funds the equity component gives growth opportunity to investors and at the same time the debt component balances the risk.

Advantages of equity oriented balanced funds:

1. Tax advantage- the debt component provides tax advantage
2. Dynamic asset re balancing
3. Single fund which invests in equity as well as debt
4. Lower risk than as otherwise if invested in stock market
5. A diversified portfolio of investment

Best Balanced Mutual Fund- How to choose?

Balanced funds in which the major part of the capital is invested in equity market are known as equity oriented balanced funds. And yes, they are also known as equity oriented hybrid funds.

• Certain part of money is invested in debt securities to limit the risks.
• Ideal for investors who want to invest in stock market and at the same time want to keep the overall risk level low.
• The portfolio of these funds typically comprises of at least 65 % of the equity funds and the rest of the funds in the debt funds to minimize the risk.
• The equity component of the portfolio gives the investor the opportunity for growth whereas the debt component balances the risk of the investment.

Advantages of equity oriented balanced funds:

1. Superior risk adjusted returns
2. Dynamic asset rebalancing
3. Tax advantage (due to their debt component)
4. Single fund for investing across equity and debt
5. Diversified fund
6. Relatively lower risk

To know more about balanced funds, please go through the below links:

https://groww.in/blog/balanced-funds-popular-good/

https://groww.in/blog/how-to-choose-best-balanced-mutual-funds-2/