Balanced Funds as sub category of mutual funds have witnessed significant inflows this year and now account for 50% of net mutual fund investments made since 1st January 2017, according to an Economic Times (ET) report. This seems to be in line with the observation that since the demonetization announcement in November 2016, mutual funds have witnessed a significant increase in popularity among investors.
The ET report further stated that a key reason for this rapid increase in mutual fund investments was the potential capability of this investment route to provide significantly higher returns that fixed deposits and savings accounts. The report also observed that these inflows showed a diversified investment approach capable of balancing downside risk of an investor’s portfolio.
The ET report also includes data obtained from AFMI (Association of Mutual Funds India), which recorded total mutual fund investments since 1st January across key categories at Rs. 1,000,325 crores. Out of this figure an estimated 50% was invested in various balanced fund schemes while an additional 25% was invested in equity schemes such as large cap, mid cap and multi cap funds according to ET.