Balanced Mutual Fund
Mutual Funds that comprise stocks and bonds both are called Balanced Mutual Funds. A Balanced Mutual Fund's judicious exposure to both equity and debt enables it to give optimized returns without taking too much risk.
Major advantages of Balanced Mutual Funds:
A well-managed Balanced Fund can achieve the twin objectives of good returns (better than Bank FD returns) through equities and less volatility via debt instruments.
Dividends from Equity-oriented Balanced Funds are tax free.
Long-term capital gains are exempt from taxes.
You need not worry about re-balancing, as it is managed by the fund manager.
Investors can also opt for a dividend option and get regular income from the Balanced Funds.
BNP Paribas Mutual Fund is coming out with a New Fund Offer (NFO) called BNP Paribas Balanced Fund. The scheme's investment objective is to generate income and capital appreciation by investing in a diversified portfolio of equity & equity-related instruments and fixed income instruments.
Why BNP Paribas Balanced Fund?
Focus on long-term wealth creation through a combination of Equity, Arbitrage and Debt.
Diversified equity portfolio with a Large Cap bias and judicious exposure to Mid and Small Cap stocks.
Debt portion provides cushion, thereby reducing the overall volatility of the fund.
As the fund has maximum 70% exposure to equity (including 10% arbitrage), it qualifies as a low-risk product vis-à-vis pure-play equity funds that are considered risky.
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