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Journalism of Courage
MUMBAI, SEPT 19: Mutual funds companies are competing with each other to launch balanced funds — which invests both in equity and debt — in order to tap an increasing number of risk-averse investors.
Birla Mutual Fund has just opened their scheme while Prudential ICICI has also announced a similar scheme. Many other players are toying with the idea to launch a balanced scheme. Alliance, JM Mutual are some mutual funds which have balanced funds in their product portfolio.
What seems to have triggered this move by the mutual funds is the fact that investors who were till recently contended in investing only in their debt schemes are now showing interest in equity markets. Fiscal incentives in the form of tax-free dividend and the consistency shown by the market, of late, are some of the reasons attributed for change in the perception of the investors. But they are still not willing to put their money in full in equity schemes. It is these investors who mutual funds are planning to tap through a balancedfund. They want to position this scheme as an ideal step through for investors’ ultimate graduation into equity scheme at a later date when their confidence level improves suitably.
"Balanced funds are stepping stone for investors to equity funds and is the best way to get the conservative investors to taste the benefits of equity,” says Vivek Reddy, chief executive of Kothari Pioneer Mutual Fund (KPMF). In a hot equity market, balanced funds have a reduced downside, he said.
