If you are interested in mutual fund schemes, you must have known that the past couple of years brought great recognition to balanced advantage funds. Also known as dynamic allocation funds, these balanced advantage funds are reported to have inflows of more than 3000 crores. So what exactly are these funds? Aren’t they subject to market volatility? Do they keep your money safely growing? Let’s discuss all these topics in detail to understand why balanced advantage funds have become the talk of the town and why you should be investing in the same.
The concept of dynamic allocation of funds is actually related to the criteria of hybrid mutual funds. In this pitch, the fund managers would take your money to invest between two different types of asset classes, i.e. debt and equity funds. The concept is pretty simple, the dynamic allocation works depending on the market condition. When the equity market is up, they will sell equity funds and manage the portfolio between equity and debt instruments.
The objective is to minimize the downsides or dynamically manage the investment portfolio to ensure higher gains for the investors.
Most balanced advantage funds work on the asset re-balancing model. Depending on the market condition the allocation moves between debt and equity. There are multiple reasons that investors choose this scheme:
Needless to say, debt securities somewhat minimize the vulnerability of your portfolio from the equity market risks. Still, you need to be mindful of the fluctuating NAVs and have to wait for a minimum of 3 years to reap huge returns. Experts recommend that an investment period of around 3-5 years can get you good returns.
Balanced advantage funds are great for your medium to long term financial goals. For tax efficient returns in the next 3 to 5 years, you get to choose among the various funds available in the market. If you are clueless about the best performing balanced advantage funds in the contemporary market, it is recommended to contact an investment advisor.
Some examples to Balanced Advantage Funds are - Edelweiss balanced advantage fund, kotak balanced advantage fund, tata balanced advantage fund, nippon india balanced advantage fund, icici balanced advantage fund direct growth.
However, if Balanced Advantage Funds are onboarding your portfolio in near future by any chance to you are looking out for the in-depth knowledge, you can anytime connect with the executives at Lakshmishree Investments. You can also check out this blogs of Everything You Need to Know About Mirae Asset Balanced Advantage Fund to learn more.
Open your Demat Account with Lakshmishree and join our telegram channel or search us on Telegram named - "Lakshmishree Group" to check out daily calls that motivates profitable trading.
