Many mutual fund investors are moving away from equity related funds like balanced funds in the wake of recent negative market trend and the announcement of dividend distribution tax of 2018.
With markets acting in a very volatile manner in the past few months and introduction of DDT have made many people unsatisfied with mutual fund return expectations. Especially the mutual fund schemes that promise fixed income are also not performing well due to market correction and low bond yields.
So what is the best investment strategy in this scenario?
The best option at hand is to shift their investment option from dividend to growth. And invest in balanced funds in long term and not just for regular payouts.
It is better to opt for pure debt funds or go for an systematic withdrawal plan (SWP) if your looking for regular income.
The impact of DDT in the end might not be drop in frequency of dividends, but the dividend amount will surely be hit.
If you are still unsure of your balanced funds, look at your priorities, if you have a moderate risk profile and have a investment tenure up to 5 years balanced funds will give you the returns expected say industry experts.