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What is the difference between balanced and balanced advantage mutual funds?


1.Balanced funds and balanced advantage funds are two types of hybrid funds that invest in equity and debt securities.

2.Balanced funds have almost equal allocation (minimum 40% and maximum 60%) to both asset classes whereas balanced advantage has no fixed guideline and have the flexibility to switch between both the asset classes.

3.Over the long term, balanced funds give more stable returns compared to balanced advantage funds.

4.Balanced funds are taxed as debt funds whereas balanced advantage funds can be taxed as equity or debt depending upon the asset allocation at the time of redemption.

5.The expense ratio of balanced funds is typically lower than balanced advantage funds.



Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.



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