Balanced and solution-oriented Funds.What are these?

Balanced or hybrid funds essentially invest in a mix of two or more asset classes.

For instance, a fund that invests in equity and bond in a pre-determined proportion is an example of a
balanced fund. The bond component in such a fund creates an income stream and balances out the volatility of equities whereas the equity component increases the fund’s growth potential.

The main objective of a Balanced Fund is to enjoy the benefit of diversification. Instead of taking a high risk with equity, the balanced fund helps you invest prudently with lower risk.

This fund is ideal for investors who seek income, capital appreciation and safety.

Solution-oriented Solution-oriented Schemes

This is a new category introduced by SEBI in 2018 and covers goals like retirement and children’s education.

As a result the prices of bonds can rise or fall similar to stock markets.

Solution-oriented schemes make it easier for an inexperienced investor to make a goal-based investment especially if they do not have the skills to create a well-balanced portfolio. These funds have a mandatory lock-in period of 5 years.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.