markets as on: 10-03-2017 16:00 hours

SENSEX 28,946.23 17.10 USD 66.60 0.11
NIFTY 8,934.55 7.55 EUR 70.70 0.12
BSE-100 9,208.05 0.46 GBP 80.91 0.30

The write up contains information related to balanced fund for Non Resident Indians. Features of balanced fund and requirements for NRI to invest in balanced fund in India are briefed in this write up.

Stay in Touch
RSS Face Book Tweeter

Balanced fund for Non Resident Indians

Mutual funds and Non Resident Indians:-
The growth of market in India and relaxation in regulations related to NRI investment in Indian market have encouraged and appreciated investments made by Non Resident Indians in mutual funds in India. There are many options viz-a-viz objectives, companies and return statistics while investing in mutual funds in India.
Balanced fund:-
A fund with a corpus of investments; runs on an objective to combine the ‘growth centered’ nature of equity funds and ‘secure return’ nature of debt fund. These funds tend to attract investors (beginners, defensive investors who expect considerable growth on investment) since risk associated with them are comparatively low.

Features of balanced fund
There are certain factors and features in general that constitute a balanced fund. They can play a key role in choosing a balanced fund.

Allocation of assets

This constitutes the basic nature of balanced fund. As definition of balanced fund goes, this feature actually specifies the percentage of investment made in equities and percentage in debt securities. Most of the mutual funds present in market today invest 60% of their investment in equities and stock market and 40% in debt securities.

Deviation in allocation

This factor defines what the percentage of risk associated with the particular investment type is. Higher the value of deviation in asset value higher will be the probability of gain or loss and hence higher risk on an investment.

Diversification in investment

The mutual fund provider has a range of options for investment in both equities and debt securities. This diversification options depend on core investment objectives. For ex: one mutual fund mentions that it sells a particular holding when expected gain is reached or there is no probability of reaching expected target. It is important for an investor to know what strategy a particular mutual fund chooses for investment. Commercial papers, certificate of deposit, treasury bills, stock of agricultural products, government securities are all few investment options in balanced fund.

Entry load, exit load and other charges

There are set of charges a mutual fund may impose on the investor in order to process the investment and maintain the corpus. These are charged in the form of entry load, exit load etc. Usually these loads constitute a percentage of amounts of units.
NRI Requirements to invest balanced fund:-
There are set of requirements in general for a NRI to invest in mutual fund.
  • An NRI should hold NRO or NRE or FCNR type of account.
  • All investments in mutual funds can be made only in Indian Rupees.
  • Redemption amount will reach them in the form of cheque through post.
  • TDS is applicable on redemption amounts; there are tax benefits that they can avail according to IT act.
There can be other specific requirements depending on the mutual fund and also changes made in judicial laws and acts. So it is important for an NRI to stay updated with such information.