Tata Balanced Fund vs. HDFC Balanced Fund

Last Updated on

Here is a comparison between Tata Balanced Fund and HDFC Balanced Fund in term of  risk and reward over the last 8 years. The primary objective of this post is to showcase the fund A vs fund B comparisons tool at freefincal. The choice of funds is only an excuse.

I am a strong advocate of balanced funds. I invest in them and treat them as 100% equity in my portfolio (because I have separate debt instruments) , for the simple reason that they offer pure equity fund like returns much lower risk: Balanced Equity Funds: the low risk, high reward option.

That said, I do not recommend the use of balanced fund for goals less than 10Y away, unless you are comfortable with the excessive risk (understand implications, that is).

Tata Balanced and HDFC Balanced are both popular equity-oriented balanced funds. The former is 25+ years old and the later, 15+. From what I see on  the respective AMC pages, I think there is not too much difference in their investment strategies. Both have an actively managed equity and fixed income portfolio.

NAV Movement Tata-balanced-1

This is the normalized NAV movement from 3rd April 2006. Not much of a difference.

Rolling Returns 5 years

The return for every possible 5Y duration between April 3rd 2006 and 15th April 2016 is plotted below. Each point in those curves represents lumpsum 5Y return. This is computed using the Rolling Returns Calculator: Fund A vs. Fund B


Again, not too much difference. Notice the spread in returns (minimum returns to maximum returns possible over 5Y investment durations. Do not choose balanced for 5Y periods!

Rolling Returns 3 years

The reason I plot 3-year rolling returns is because of this statement by Tata AMC:

Who should invest and why: Equity Investors seeking long-term wealth creation investment avenue with moderate to aggressive risk appetite and investment horizon of 3yrs or more (among other reasons).

3Y?!! That is ridiculous. If an ‘advisor’ parrots the same information to an investor, run away!


Returns comparison (click to expand)


Again not much difference because the NAV movement is not too different.

Risk-return score

The risk-adjusted return is computed in 18 different ways using the Mutual Fund Analyzer: Fund A vs. Fund B. The metrics require that monthly returns satisfy a bell curve distribution. This rarely, if not never happens. So use this and any of the risk-adjusted measures (alpha, Sharpe, Sortino etc) that you see in fund portals and those use in star ratings with a large grain of salt!


A score of above 50% means Tata Balanced has offered better risk-adjusted return for the corresponding investment duration in the x-axis. This suggests that ‘on the whole’ HDFC balanced has done a bit better.

Upside and Downside captures

Upside capture in this context measures ‘average’ monthly returns generated by Tata balanced when HDFC balanced gave positive monthly returns. And downside capture measures the same quantity when HDFC bal. generated negative monthly returns. Read more: Simplify Mutual Fund Analysis with Upside/Downside Capture Ratios


Notice that the upside capture of Tata bal (fund A) wrt HDFC bal. (fund B) is always less than 100%. This means, the Tata fund has generated lesser positive returns than the HDFC fund.

The same applies to the downside capture. Which is good! This is because, the negative monthly returns of Tata Balanced is not as high as that of HDFC Balanced. However, this downside protection does not seem to have helped in generating superior returns. Probably because the lack of upside returns cancels with the downside protection.


  1. If you are looking for a balanced fund, choose either one, but do not use any balanced fund for short durations.
  2. If you an existing investor in HDFC balanced, I think you should be reasonably happy.
  3. Same as above for Tata balanced investor.
  4. Don’t see any invest to switch from one fund to another.
Do share if you found this useful

Create a "from start to finish" financial plan with this unique open-source robo advisory software template

 Don't like ads but want to support the site? Subscribe to the ad-free newsletter! 
You will get the full post-ad-free delivered to your inbox for Rs. 3000 a year. Follow this link to read the terms and sign up! 

About the Author M Pattabiraman author of freefincal.comM. Pattabiraman is the co-author of two books: You can be rich too with goal based investing and Gamechanger. “Pattu” as he is popularly known, publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis, including a robo advisory template for use by beginners. Contact information: freefincal {at} Gmail {dot} com He conducts free money management sessions for corporates (see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints.

Content Policy

Freefincal has original unbiased, conflict-of-interest-free,  topical reports, reviews, commentary and analysis on all aspects of personal finance like mutual funds, stocks, insurance etc. All guest authors and contributors to the site also do not have any conflict of interest. If you find the content useful, please consider supporting us by (1) sharing our articles and (2) disabling ad-blockers for our site if you are using one. No promotional content We do not accept sponsored posts and link exchange requests from content writers and agencies. This is our privacy policy Our website is non-profit in nature. The revenue from the advertisement will only be used for hosting charges, domain registration charges, specific plugins necessary for traffic growth and analytics services for search engine optimisation.
Want to conduct a sales-free "basics of money management" session in your office?
I conduct free seminars to employees or societies. Only the very basics and getting-started steps are discussed (no scary math):For example: How to define financial goals, how to save tax with a clear goal in mind; How to use a credit card for maximum benefit; When to buy a house; How to start investing; where to invest; how to invest for and after retirement etc. depending on the audience. If you are interested, you can contact me: freefincal [at] Gmail [dot] com. I can do the talk via conferencing software, so there is no cost for your company. If you want me to travel, you need to cover my airfare (I live in Chennai)

Connect with us on social media

Do check out my books

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingMy first book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.  It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You WantGamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantMy second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner

The ultimate guide to travel by Pranav Surya

Travel-Training-Kit-Cover This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step.  Get the pdf for ₹199 (instant download)

Free Apps for your Android Phone

All calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)

Blog Comment Policy

Your thoughts are vital to the health of this blog and are the driving force behind the analysis and calculators that you see here. We welcome criticism and differing opinions. I will do my very best to respond to all comments asap. Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.


  1. Dear Mr. Pattu,
    Thanks a lot for the post. You have answered some of the queries I had for balanced funds and specifically for these 2 funds. I am also a strong believer in balanced funds as the investor does not need to worry about balancing and has given returns at par with pure equity funds.
    I am an investor in the Tata balanced fund. I was also thinking to include one more balanced fund in my portfolio, but not HDFC Balanced as both have similarities. Please advice as to whether that is a good strategy. If so, please suggest any other balanced fund for long duration. Thanks,

    1. Adding one more balanced fund to the portfolio does not add a significant diversity (style, stock or sector; none). Do it only if you have a very strong reason to do so.

  2. Thanks Pattu!! This exactly the kind of analysis required and I have been doing/revisiting in last many months periodically in order to diversify across fund houses. Disclaimer: I have everything tied up in HDFC (Balanced and Prudence)!.
    Now coming back to current state: For now, I have decided against adding Tata Balanced to the mix, simply because their ‘expense ratio’ seems to be way higher than HDFC Balanced.
    All things being equal, and with adjustment for expense ratio, Tata Balanced performance overall would be a bit less than HDFC Balanced.

    Btw, this brings us to the generic topic of how best do we account for expense ratios in such tie breaker scenarios?

    Thanks for the excellent post 🙂

  3. Dear Pattu:
    I hold Tata Bal, L&T prudence & ICICI pru Bal Adv.
    ICICI pru did not fall. L&T is ok. Tata Bal it fell, not heavily. As you said here, I will hold for another 10 yrs. Please give me your opinion, whether i can shift ICICI bal adv to Tata Bal and tell me the time to shift

  4. Dear Pattu sir,

    This downside protection does not seem to have helped in generating superior returns. As we want superior returns, we need not stick to downside protection ratio. Can we conclude this?

    Thank You

Leave a Reply

Your email address will not be published. Required fields are marked *