The popularity of balanced schemes may wane among investors as a Budget proposal to impose a dividend distribution tax (DDT) of 10% on dividend declared by equity-oriented mutual fund schemes could reduce the flows into this category.
Investors had poured money into dividend plans of balanced funds -- which invest in a mix of equities and bonds — in recent months, partly because of the informal assurances of a fixed payout by fund houses every month. Rising stock markets also attracted the funds as investors sought to cut their exposure in shares.
