Debt Mutual fund V/s. Balanced Advantage Fund

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DIVYESH JAIN (Querist)
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17 November 2022 Dear Sir,

I have invested a lumpsum amount of Rs. 10 lacs in Debt Mutual fund a year back and I have got a return of 4% on that investment.

Is it advisable to stay invested in Debt Mutual fund or should I switch to some other alternative fund like Balanced Advantage Fund. I am using these funds as an alternative to Fixed deposits as interest rates are quite low in fixed deposits.

Please help me in this matter.

Regards,
Divyesh Jain

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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17 November 2022 As such return in debt funds were lowest in last few quarters. It is expected to give slightly better return in next few quarters, specifically money market funds or short term debt funds.
Balance advantage funds give about 8% or more due to about 65% equity portion in it. It is having more risk factor, and hence averaging is must.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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17 November 2022 That means I should divide the investment in 2 parts. Half in Debt and half in Balanced Fund.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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17 November 2022 That depends upon the choice of investor with his/her risk appetite, along with time duration of investment. Looking at your need it can be suggested to invest about 33% in debt (for emergency need) and 66% in BAFs (with about 3 years horizon).

DIVYESH JAIN

DIVYESH JAIN (Querist)
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18 November 2022 Thanks for your advice Sir. Will decide accordingly.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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18 November 2022 Best of luck....

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