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Question
What is balanced funds? How do I start investing in it? What is the minimum price we can start? Which funds are best to invest?

Answer
Balanced fund is also known as hybrid fund. It is a type of mutual fund that buys a combination of common stock, preferred stock, bonds, and short-term bonds, to provide both income and capital appreciation while avoiding excessive risk.

Balanced funds provide investor with an option of single mutual fund that combines both growth and income objectives, by investing in both stocks (for growth) and bonds (for income). Such diversified holdings ensure that these funds will manage downturns in the stock market without too much of a loss. But on the flip side, balanced funds will usually increase less than an all-stock fund during a bull market.

Best way to start investing in Balanced Mutual funds is through SIP. SIP has the benefit of rupee cost averaging which can save you from the volatility in the market and ensure better returns in the long term.
Best balanced Mutual funds to invest are as follows

• HDFC Balanced
• HDFC Prudence
• Reliance Regular Savings Balanced
• DSP Black Rock Balanced 

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