Like a mirage, balanced funds give the illusion of being the safest and the most suitable investment for every kind of investor. However, on a closer look, ground reality might be quite different.
Imagine a scale with a 70kg weight on one pan and a 30kg weight on the other pan. Will this scale ever balance? No! Similarly, a balanced fund, which can allocate nearly 70% of its funds to equities, will often fail to balance and have an inherent skew.
These days balanced funds are being endorsed as the go to option for every investor looking for safe returns. Whether it is a retired individual looking for relative safety with returns more than traditional fixed deposits or a middle-aged person who wishes to mitigate the volatility from equities, balanced funds top every recommended list.
While balanced funds are a good investment product, we cannot ignore that many equity oriented balanced funds are neither the “safest” option and nor are they immune to the vagaries of the stock market. Instead, it could be advantageous to turn your attention to multi asset funds which invest in equities, debt and gold with an intent to not just maximise returns but also to pursue judicious asset allocation.
These funds are relatively stable options where both asset allocation and rebalancing, the two basic tenets of rebalancing, is taken care of by experts. Thus, they act as a true Balanced Fund. The Quantum Multi Asset Fund invests in various equity, debt & gold funds of Quantum Mutual Fund and is a one stop shop for investors looking to diversify their portfolios, through investments in various asset classes.
