Balanced Fund

Abalanced fund is scheme geared toward mixture of safety, income and modest capital appreciation. The amounts that such a mutual fund invests into each asset class usually must remain within a set minimum and maximum. To a large extent, the returns depend on the performance of the equity portion in the portfolio. There is some flexibility in changing the asset composition between equity and debt and fund managers exploit this to buy the best asset class at each time.

Balanced Schemes offer the middle path by combining both growth and income. As such, these schemes invest both in equities and in fixed income securities.