SBI Mutual Fund to launch SBI Balanced Advantage Fund
India’s biggest asset management company by asset under management has announced the launch of SBI Balanced Advantage Fund. This is an open-ended dynamic asset allocation fund that seeks to generate long-term capital appreciation by aiming to capture the potential upside and limit the downside in volatile equity markets. The scheme performance will be benchmarked to CRISIL Hybrid 50+50 – Moderate Index TRI. The new fund offer would open on August 12, 2021, and close on August 25, 2021.
Dinesh Balachandran and Gaurav Mehta will be managing the equity portion of the scheme. Dinesh Ahuja will be the Fund Manager for the fixed income portion while Mohit Jain is the dedicated Fund Manager for managing overseas investments in the scheme.
What is new?
In addition to normal systematic withdrawal plan (SWP), a ready-made tool to get regular cash flows in a very simple and tax-efficient manner, the scheme also offers SWP (A) facility that you can opt for to meet your regular cash flow requirements. Under this facility, the investor can redeem a fixed amount or a fixed percentage of the cost of investment as on date of registration of SWP (A).
The withdrawal frequency under SWP (A) would be monthly, quarterly, half-yearly, or yearly. The limits placed on the withdrawals from the scheme through SWP (A) are explained in the table below:
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Frequency
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Fixed per cent of the cost of investment, or a specified amount (IN `)*
Applicable months for withdrawal in a specified frequency
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Applicable months for withdrawal in a specified frequency
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Monthly
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0.50
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All months
|
|
Quarterly
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2
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December, March, June, September
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|
Half-yearly
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3
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March & September
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|
Yearly
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6
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March
|
|
Monthly/quarterly/half-yearly/yearly
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Any amount
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Applicable months as per the chosen frequency
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What is different in this fund is the percentage withdrawal from your corpus. While most other funds allow you to set up a fixed sum of SWP every month, this allows you to a percentage withdrawal.
The reason why we believe it is superior to fixed percentage is that it takes into account the investment value. It has been studied and researched that if you withdraw between 3-4 per cent from your retirement corpus, it will outlive you. Besides, percentage withdrawal will help you to redeem less when the market is in a downturn and more when the market is in upward momentum.
One of the drawbacks of such a withdrawal system is that at times, it may fail in providing you the required cash flows if there is a sharp correction in the market and you will depend on other sources to fill the gap.