Top 7 Best Balanced Advantage Mutual Funds for Monthly Income (Dividend)

You invest in a specific brand’s stock, gathering the impressive outlook of the highly soaring market and its performance at par. However, crisis hits the market and affects your specific investment with a huge blow. The next thing you know is that you’ve been gripped by a strong upper-hand of debt exposure due to the downfall of the market and the subsequent loss. What do you do?

Balanced Advantage Mutual Funds: What are they?

While the finance jargon doesn’t let you breathe, let’s break this down simply for the layman to understand. While considering an investment, you’d consider investing in equity stocks in order to acquire market-linked returns, but that’s like taking a major risk, especially if you can’t sustain the blow.

Debt instruments pertain to investments that allow you to pool your assets with the assurance of acquiring fixed returns at some point.

Balanced mutual funds allow you to look at the grander picture, despite the risk at hand. These funds allow you to have an exposure of both market-linked and fixed returns, so at the end of the day – in lieu of market-exposed risks and its downfall – you can still be at the liberty of enjoying over-all returns.

Apparently, investors are liable to consider balanced mutual funds due to two reasons, majorly. One, these funds allow them to take market-suitable risks within short time periods, and two, they help them to diversify and capitalize on their investments for the acquisition of indefinite and basic over-all returns from significant debt exposure.

Advantages and Disadvantages of Investing in Balanced Mutual Funds

There is increased stability and feasibility with the investment of assets in balanced mutual funds, mainly because you get to enjoy combined returns significantly. So, by investing 35 – 40% in debt instruments and 60 – 65% in equity funds, you get to enjoy combined returns but with vague moderate risks at hand.

Despite this, there is no such secret that hides the main truth – equity funds are increasingly volatile and might pertain to even higher risks for you to enjoy basic returns in the end. Secondly, combined returns, at times, don’t add up to your benefit and can amount to significantly nothing in the longer run.

Best Balanced Mutual Funds for Better Dividends

Balanced mutual funds work in correlation to the market value of your assets. These weather-dependent funds, also known as dynamic asset allocation funds, work out the whole market-to-basic returns ratio with a basic formula – price to book value (P/BV) – for calculating the ratio from volatility and increments in the market.

If the ratio increases, then your fund will simply have to rely on fixed returns via debt exposure and if it decreases, then your equities are safe for you to cash on market-dependent returns.

Mentioned below are 7 of the best balanced mutual funds for monthly income (dividends).

ICICI Prudential MIP 25

This balanced mutual fund is primarily a Hybrid-Hybrid Debt Fund that focuses on a scheme pertaining to income generated from investing assets in debt and money-market instruments.

The ICICI Prudential MIP 25 was launched initially on 30th March, 2014, where it garnered significant attention and was ranked 2nd in the aforementioned category.

Despite this fact, the scheme tends to capitalize on a portion of equity investments as well, but doesn’t tend to provide any assurance due to the volatility of the market, pertaining to moderately high risks.

The ICICI Prudential MIP 25 generated a combined return of 5.1% in 2018. The years 2009 and 2012 might have been the highlight for investors since the generated combined returns amounted to 22.5% in both the years.

The scheme is expected to benefit on a longer term, since according to predictions published on the 12th of April, 2019, the compound annual growth rate for 5 years is expected to be 11.9%.

Aditya Birla Sun Life Balanced Advantage Fund

This fund is a Hybrid-Dynamic Allocation Fund, which means that its main goal is to invest in equity funds and debt instruments for generation of long term capital revenue.

With an aim to keep up with moderately high risks of market volatility, it has been ranked 19th in the Dynamic Allocation Category.

Its net assets amount to Rs. 2,827 Crores as of Feb 28th, 2019 with a net asset value of Rs. 52.89, as reported on April 12th, 2019. With a minimum investment of Rs. 1,000, the Aditya Birla Sun Life Balanced Advantage Fund has a 5-year combined returns plan of 11.7%.

Tata Hybrid Equity Fund

With an initial investment as low as Rs. 5000 in assets, the Tata Hybrid Equity Fund is tending to cover returns generated from both government debt exposure and equity stocks.

This fund has equity shares in the ICICI Bank and Reliance Industries as well, and has tended to generate 15.36% in combined returns since 1995 following its launch. The monthly income generated in March 2019 amounted to Rs. 5.17 per unit with a net asset value of Rs. 59.68.

HDFC Balanced Advantage Fund

The HDFC Balanced Advantage Fund is probably one of the top-leading hybrid funds – primarily because it has a better distribution of monthly dividends due to assets parked in investments worth Rs. 37,395 crores (million).

The monthly income plan has a net asset value set to Rs. 29.74, currently. Despite the issuance of taxes on the capital appreciation of mutual funds, the monthly income generated on Feb 25th, 2019 was 0.31 per unit.

Principal Balanced Advantage Fund

The Principal Balanced Advantage Fund also seeks to guarantee a long-term monthly dividend by allocating its assets in equity funds based on the Price Earnings Ratio (PE Ratio) and defensively, in debt instruments for fixed returns.

For instance, if the market is performing poorly and there’s an increasing chance for you to lose massive returns, then there will be a shift towards the fixed income part of your funds, saving you from a major loss.

If the market is performing exceptionally great for your assets, then there will be a shift towards your equity funds, causing you to cash on market-suitable returns. It’s a win-win situation in both cases.

Its net assets amount to Rs. 188 Crores as of February with a net asset value reported as Rs. 20.79 per unit on April 12th, 2019. This fund, pertains to moderately high risks and can be volatile as well.

L&T Hybrid Equity Fund

The L&T Hybrid Equity Fund holds equity shares in HDFC bank with debt instrument holdings in ICICI Bank, NABARD and government debt as well. In addition to its monthly dividend plans, the fund gives its investors the feasibility to opt for yearly incomes as well.

Despite having the assurance of generating long term revenue with fixed returns, the fund capitalizes majorly on equity shares, drifting towards the market with higher volatility risks. It is ranked 28th in the Dynamic-Allocation category with fixed returns amounting to 11.9% for a 5-year plan.

Edelweiss Balanced Advantage Fund

The Edelweiss Balanced Advantage Fund extends its scheme for longer periods of time – all the while by basking under low volatility and moderately high market risks as well.

This hybrid-dynamic allocation fund is apparently ranked 26th in the category and has so far invested – and will continue to do so in lieu of the market – in equity stocks, debt instruments, equity derivative strategies and arbitrage opportunities as well.

Its net assets amounted to Rs. 1,297 Crores as of February with a net asset value of Rs. 23.49 as per monthly income plan.

Despite the inflation and the fluctuations in economy, you require stability and of course, proper maintenance of your investments with adequate cash flow improvements. Perhaps it’s time you considered investing in balanced mutual funds to save you from any economic adversities.