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Sebi defines a balanced advantage fund as 'an open-ended dynamic asset allocation fund'. As the name suggests, these schemes dynamically manage the equity and debt part of the corpus based on the market conditions. Balanced Advantage Funds(https://www.edelweissmf.com/types-of-mutual-funds/hybrid-fund/edelweiss-balanced-advantage-fund) is proved to give great benefits to those who are willing to take a market risk while looking for some fixed returns as well.
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What are Balanced Advantage Fund? • It is a re-categorization of Hybrid Funds done by SEBI and it differs from Balanced Funds. Balanced Funds have a fixed ratio for investment in equity and debt with a narrow band for flexibility, about 40-60% equity allocation, whereas Balanced Advantage Fund invests 33% in pure equity and 33% in arbitrage to keep gross equity investments around 65% and invest the rest in debt. • It has the flexibility for dynamically shifting the corpus to and from equity/debt.It aims for capital appreciation but also seeks to guard against volatility. They are taxed under Equity Funds (10%) and not Debt Funds (20% with indexation).
Benefits of Balanced Advantage Funds • Most of the balanced advantage funds seek high returns from equity investments. • The dynamic allocation provides flexibility to the managers and portfolio diversity to the investors as there is continuous shifting in assets as per prevailing market conditions. • Balanced Advantage Funds are relatively less volatile and safer than other equity funds as when markets are expensive, fund allocation to debt is increased which acts as a security. • Start your investments by investing in Balanced Advantage Fund today!
