Balanced funds: high dividends sustainable?
Many balanced funds have given high dividends regularly in the past 2 years. But equity markets go up and down, and investors should not expect this to continue
Is it unusual that two of India’s top five equity-oriented funds are balanced funds? HDFC Prudence Fund (HPF) is India’s largest equity-oriented fund with assets under management (AUM) of Rs31,717 crore, as of September 2017. ICICI Prudential Balanced Fund (IPBF) packs an AUM of Rs19,601 crore. The question we ask is: are investors smart to choose a lower-risk route to equity exposure through a balanced fund, or is there some other story playing out?