When starting an investment, investors typically seek information on which investment instrument has advantages to help them achieve their goals.
Speaking of advantages, each investment instrument has several benefits that make it more suitable for specific investors compared to others.
Currently, there are many types of investment instruments to choose from, including stocks, Bonds, and Mutual Funds. Within the scope of Mutual Funds, there are several product types such as Equity Mutual Funds, Money Market Mutual Funds, Fixed Income Mutual Funds, and Balanced Mutual Mutual Funds, which will be the topic of discussion in this article.
For those who want to understand more about Balanced Mutual Fund products, read the complete discussion about types and benefits in the points below.
Types of Balanced Mutual Funds
As the name suggests, Balanced Mutual Funds are instruments suitable for those who want to invest in several instruments simultaneously. This is because, as quoted from Investopedia, Balanced Mutual Funds are instruments which investment funds are allocated to various assets with varying levels of risk, such as stocks and Bonds.
Based on their fund placement, here are some types:
- Conservative Type
The first type is conservative. In this conservative type, Investment Managers tend to allocate funds from investors to Bonds, fixed-income instruments, and also the money market more than stocks.
- Aggressive Type
Next is the aggressive type. In contrast to the previous Balanced Mutual Fund type, in the aggressive type, the Investment Manager allocates more funds to stocks than other instruments, such as fixed income and the money market.
This is done based on the consideration that stock instruments have greater profit potential. If there is an increase in unit prices, investors will also receive a larger return. This situation also applies in reverse.
- Moderate Type
The last type of Balanced Mutual Fund is moderate. In this type, the fund placement by the investment manager is generally balanced, meaning each instrument like stocks and fixed income receives an equal allocation. By placing funds in a moderate type, the potential for losses can be minimized.
Those are the types of Balanced Mutual Funds that you should be aware of. Since the selection of this type of Mutual Fund can significantly impact investment results, both in terms of profits and losses, careful consideration is necessary.
Benefits of Investing in Balanced Mutual Funds
As mentioned earlier, each investment instrument has its own benefits. In the case of Balanced Mutual Funds, there are several advantages that can be gained if you try this type of investment.
With management assisted by the presence of Investment Managers, this instrument, which works by allocating funds to several assets at once, offers several advantages that may attract you as an investor.
Some of the benefits of Balanced Mutual Funds include:
- Affordable Initial Investment
One of the benefits you can experience as an investor by choosing Balanced Mutual Funds is that the required initial capital is generally affordable. Therefore, for beginner investors, this type of instrument is quite attractive.
The amount of initial capital varies widely. You can choose a product with an initial capital value that suits your financial condition.
- Competitive Returns
Another benefit of Balanced Mutual Funds is that the return on investment tends to be competitive. This is based on the fund allocation.
Returns will be greater if more funds are allocated to stock instruments. In line with the significant risk potential, stocks also offer the greatest profit potential compared to other instruments.
Therefore, the larger the allocation of Mixed Mutual Fund investment funds in the stock market, the greater the potential for profit or returns you will also receive.
However, this does not mean that you or the Investment Manager can simply allocate as much funds as possible to stock instruments. With a high level of risk, the allocation of funds in Mixed Mutual Fund investments needs to be done carefully to ensure that the return on investment is optimized.
- Liquidation Can Be Done Anytime
Another interesting advantage is that you can liquidate Mutual Funds at any time. With high liquidity, investors can carry out transactions such as selling or liquidating Mutual Funds whenever they want.
Once the sale transaction is complete, you can process the liquidation of Mutual Funds within a short period, typically 1-7 working days depending on the Investment Manager's regulations.
- Tax-Free Income
Balanced Mutual Funds are instruments which returns are exempt from withholding tax. Thus, as an investor, you can enjoy the investment results in full.
- Diversification of Risk
By investing in Balanced Mutual Funds, the allocation of funds to various instruments can be a way to minimize potential losses.
- Relatively Safe
Safety in investment is essential. Mutual Fund investments are generally supervised by the OJK (Financial Services Authority). With supervision from this institution, the investment you make is considered safe. Investment Managers responsible for managing investments will also perform their duties with caution.
Interested in Investing in Mutual Funds? Start with DBS Treasures as Your Partner
When you are interested in starting to invest, such as with Mutual Funds, important things to consider are understanding how Mutual Fund investments work and selecting an investment partner.
Talking about partners in investment, the right partner and recommendation for those who want to try investing in Mutual Funds is the priority banking DBS Treasures.
With DBS Treasures as a partner, you will gain various benefits and conveniences. One of them is getting insights from financial experts' teams that can be used to guide you during the investment process.
Be supported by curated market analysis from a team of financial experts who will communicate it. Seize the latest opportunities that have been tailored to your risk profile and portfolio needs, driven by Artificial Intelligence/Machine Learning (AI-ML). This insight is equipped with curated solutions related to investment (Grow) and insurance (Protect), so you can quickly and confidently invest through your preferred media.
To better understand Mutual Fund investments with DBS Treasures, please visit this page for more information.
