Have you ever tried buying a simple financial product, like a term insurance?

Chances are that some so-called investment consultant will confuse you with so many permutations and combinations that you will resign yourself to buying something that is not needed.

For instance, an investment consultant from an insurance company will throw up excel sheets that project your future wealth requirement. In reality, you were just looking for a simple life insurance cover, and not any returns.

"Simple investing techniques can translate most of these hard-to-understand financial products. That, too, at much lower costs," said Kartik Jhaveri, director, Transcend Consulting, a wealth management firm. He believes that simple investing can also deliver better results.

Let's look at some popular products and how a simple investment strategy can achieve the same goals:

Balanced Funds

Balanced funds maintain an equal proportion of assets between equity and debt. Conservative investors prefer them as they are less risky due to a higher allocation to debt. "To avoid long-term capital gains tax, most funds keep their equity exposure at above 65 per cent," said Gaurav Mashruwala, director, ACE Financial Advisory Services. This is as good as investing in an equity-oriented fund.

This can be achieved through a simple method: Keep half of your money in a fixed deposit, and the other half in a good equity diversified fund. And the performance of balanced funds proves that, in most cases, investors would have benefited more by using this technique.

For example, if you had invested Rs 100 a year back in Magnum Balanced fund, the investment would be Rs 69.26 today. But the same investment equally split between an equity diversified fund, say, DSPBR Top 100 Equity Reg and an SBI [Get Quote] fixed deposit (at 10 per cent) a year back would be Rs 90.83. The returns will be even higher if the money was invested in a debt fund that invests in bonds.

Monthly Income Plans

This category is meant for investors who need a regular income. The equity allocation in monthly income plans (MIPs) are the lowest (at around 10 per cent). The majority of the assets are in debt instruments.

But these funds come with their own set of problems. Though the investor seeks regular returns, the dividend is not given at set intervals.

Despite the equity allocation, the returns from stocks investment may not be at par with an equity diversified fund.  "As MIPs need to declare dividends, it gets difficult for them to take a long call on stocks," said an investment adviser.

In this case, investment in bond funds rather than fixed deposits can give higher returns. The best performing MIP in the past one year has been Birla Sun Life MIP II Savings 5 with 15.97 per cent returns. An investment in Canara Robeco Income, the best performing bond fund, would have yielded 28.29 per cent returns.

Capital Protection

This model is quite prominent among structured products. They guarantee capital protection and an upside in equity. Their lock-in period differs from issue-to-issue.

There can be a lot of combinations to attain the objective of capital protection and capture an upside in equity. Let's assume you want to invest Rs 100 for five years. Based on the fixed deposit interest rate, you need to split the investments in such a manner that, at maturity, it is equivalent to the capital.

If you invest Rs 69 for five years at 8 per cent in a fixed deposit, the maturity value is Rs 101.38. This means your capital is preserved. You can invest the remaining Rs 31 in an equity fund with a good track record. An equity investment can fall, but can  never be negative. For example, a stock brought at Rs 100 can fall to as low as Rs 10, but it will never be zero or negative. Whatever gains you make in the equity is your upside.

If you stay away from equity investments, you can invest in arbitrage funds. This category uses derivatives as an investment strategy. Yields in the past one year for funds in this category have been between 6 per cent and 10 per cent.

Ulips

Unit-linked insurance plans, or Ulips, combine life insurance with investments. But this is one of the most expensive investment products; at least in the first three years. Out of the total amount paid to the company in the first year, typically, only around 75 per cent is actually invested. The remaining is deducted as charges towards mortality, premium allocation, policy administration and fund management.

The investor can achieve the same objective with better results if he invests in a mutual fund and buys a term plan to insure himself.

In fact, there are mutual fund schemes that give free life insurance too. Mutual fund investment is subjected to a maximum of 5 per cent deduction only. This includes entry load and annual expenses.

Just like the above mentioned four products, almost every type of complex product can be broken into simple investments and managed easily, keeping the objective intact.