They are more of a compromise. Choosing the best debt fund manager and the best equity fund manager and you would probably get a better deal than if you were to invest in a balanced fund. Yes, there are tax benefits in balanced funds but managing investments is about optimising returns first and thereafter managing tax. Therefore it makes more sense for the investor to decide choose his own asset allocation programme based on his age, investment horizon and risk appetite than to leave the asset allocation to a balanced fund manager. We are positioning ourselves against the seven large income funds in the market place.
Returns are only one of the aspect that an investor is interested in.
When the distributor or investment advisor is advising on the choice of funds, he is also looking at service standards and disclosures. The fund that generates the best returns may not necessarily provide the best service. The commissions that are paid to the distributors are pretty much the same, give or take a few basis points here and there. So that factor is also ruled out when it comes to marketing the fund. Therefore we are focusing on two aspects, performance and service.