Your balance mutual fund is built based on the Traditional portfolio theory that suggests that splitting your investments between stocks and bonds is a smart and prudent approach to investing for the long term.
The theory is that you get some income (yield) from bonds in the period when the market is in a downtrend and stock portfolio fails to earn the capital gains.
While this sounds logical, you might want to consider what happens in a period when the balance in your balanced fund breaks down – both start to move in the same direction?
Looking at the chart below of the India-10 year bond and Nifty we can see there was a period when both, debt and equity are dropping in value
Investing some part of the investment in a thematic portfolio, you can find safety from those tough years for actively managed funds, as they are struggling to find assets that can generate positive returns and have the negative correlation to market for diversification benefits.
The risk of a thematic portfolio is not always entirely dependent on the market. The theme may have the potential to do well even when overall market does not do so well. And during this time your balance fund will fall because it is highly dependent on market performance and especially those times when it falls to get safety from the diversification benefit as discussed above.
Other advantages that you get over Mutual Funds through Neuron are:
The Investor pays the charges and fees as long as he remains with the Fund, i.e. even when the cost of his fund is declining. Other than that, the Investor will have to pay entry and exit load while investing in and exiting a Mutual fund, respectively. On the other hand, Neuron is a one-time minimal charge, which has to be paid by the client only during initial investment.
Mutual-Funds do not have a tailor-made portfolio that would invest for the Client only in a certain segment, sector, idea or theme, and hence the portfolio is scattered. While Neuron leaves that option open for the client.
Availability of a large number of funds can actually mean too much choice for an investor. So, he may again need advice to choose the suitable portfolio, unlike Neuron where the client can put their money based on a particular model or idea.
So, don't you think it is wise to put some part of your money invested in Neuron?
Data is updated on 7th per month. It gets verified every quarter by independent auditor.
Data presented here is taken from company's inception
Importance given to satisfactory resolution as per prescribed TAT