Balanced funds shrink by 72% in five months to Rs 27 bn from Rs 100 bn

10% dividend distribution tax and instances of mis-selling to blame

Balanced schemes which dabble both in stocks and debentures are losing favour with investors. Inflows into these hybrid schemes stood at Rs 27 billion in May, down 72 per cent from the peak of Rs 100 billion seen in December 2017.

The May inflow tally isn’t one off. Flows into balanced funds have been coming off gradually this year. In April, they stood at Rs 35 billion, compared to Rs 68 billion in the preceding month. 

According to industry players, bulk of the investors in these schemes were from the retail segment. The imposition of a 10 per cent dividend distribution tax