According to Harsh Roongta of Fee Only Investment Advisers LLP, a balanced advantage fund allows investors to have a measured exposure to equity without timing the market, reducing risk. These funds provide equity-like returns with lower risks compared to pure equity funds. The allocation between equity and debt is determined by a formula, making them counter cyclical.
PPFAS Mutual Fund announced the launch of the Parag Parikh Dynamic Asset Allocation Fund. The scheme opened for public subscription on February 20, 2024, and will close on February 22, 2024.
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The scheme will be benchmarked against CRISIL Hybrid 50+50 – Moderate Index. The scheme will be managed by Alok Bahl (equity investments), and Utssav Modi (debt investments).
Out of the 42 AMCs, only 29 invested in ZEE, while the remaining 13 held a very small amount of the stock, with ICICI Mutual Fund holding the highest exposure to ZEE.
Changes have been effected at prominent schemes such as ICICI Prudential Balanced Advantage, ICICI Prudential Liquid, and ICICI Prudential Multi-Asset Fund, among others.
Dynamic Asset Allocation or Balanced Advantage Fund is one of the most popular categories in the Rs 50 trillion Indian mutual fund industry with the category’s total assets under management at Rs 2.22 trillion.
Hybrid fund schemes are ones that invest in more than one asset class. These plans typically combine equity and debt, while some also include gold and REITs.
Balanced advantage funds invest in a mix of stocks, debt, and arbitrage opportunities. These funds decide their equity exposure depending on key market ratios or in-house parameters. They invest less in stocks when the market is very high or valuations are stretched. They invest more in equity when stocks are available at attractive valuations.