Top 10 best performing balanced advantage funds; Do you hold them?
Balanced advantage funds stand out due to their unique and reliable attributes.
The finance realm offers boundless exploration opportunities. Navigating where to allocate your funds can be overwhelming due to the diverse range of investment options and fund types available.
What exactly is a Balanced Advantage Fund?
This category allows for strategic asset reallocation to maximize returns with remarkable precision. It employs a dynamic approach to investing, shifting between equity and debt based on market conditions. The aim is to adjust equity exposure in response to market valuations, optimizing returns whether the market is overpriced or undervalued.
Balanced Advantage Funds, particularly the top performers, allocate over 65 per cent of their portfolio to equities, with the remainder in debt securities to ensure a robust return profile. Equity investments aim for market-driven returns, while debt securities provide stable, fixed returns. This blend of Equity and Debt requires careful consideration from investors.
Top 10 best-performing balanced advantage funds
|
Scheme Name
|
AuM (Cr)
|
1-year
returns
|
2-year
returns
|
3-year
returns
|
5-year
returns
|
|
HDFC Balanced Advantage Fund
|
77,011.15
|
40%
|
27%
|
24%
|
21%
|
|
Bank of India Balanced Advantage Fund
|
115.34
|
24%
|
20%
|
15%
|
10%
|
|
Baroda BNP Paribas Balanced Advantage Fund
|
3,671.27
|
24%
|
15%
|
14%
|
17%
|
|
ITI Balanced Advantage Fund
|
327.05
|
26%
|
12%
|
14%
|
-
|
|
Tata Balanced Advantage Fund
|
8,516.95
|
22%
|
14%
|
14%
|
15%
|
|
Nippon India Balanced Advantage Fund
|
7,588.13
|
22%
|
14%
|
13%
|
14%
|
|
Edelweiss Balanced Advantage Fund
|
10,349.08
|
24%
|
14%
|
13%
|
17%
|
|
ICICI Prudential Balanced Advantage Fund
|
54,141.75
|
20%
|
14%
|
13%
|
14%
|
|
Invesco India Balanced Advantage Fund
|
694.85
|
25%
|
14%
|
13%
|
13%
|
|
Shriram Balanced Advantage Fund
|
44.78
|
26%
|
15%
|
13%
|
-
|
Who is the ideal investor for Balanced Advantage Funds?
The stock market is inherently volatile, often hitting new highs with underlying corporate earnings not always keeping pace. Savvy investors typically seek to buy low and sell high, leveraging market fluctuations for optimal returns.
Best suited for those seeking moderate risk with a long-term outlook, the premier balanced advantage funds are designed for investors willing to commit for a period of 3 to 5 years and are comfortable with reallocating between equity and debt to enhance returns.
Retirees may find these funds appealing for generating a steady income, while experienced investors might appreciate the balance of capital appreciation and income generation, even in a volatile market.
Novice investors can also navigate the associated risks more effectively through informed equity investments, making these funds a suitable option for achieving long-term financial objectives and security.
Elements of Balanced Advantage Mutual Funds
Balanced advantage funds stand out due to their unique and reliable attributes. Despite adjustments in equity and debt based on market valuations, these funds maintain a well-managed investment portfolio through strategic asset allocation.
Key features include:
- Protection against market volatility by adapting investment proportions in response to market overvaluations or undervaluations, thereby mitigating risks.
- Achievement of financial equilibrium by expertly balancing debt and equity investments, yielding significant returns in a fair market valuation.
- Growth generation by increasing equity exposure during market undervaluations to capitalise on higher returns during overvaluations, similar to an equity fund's behaviour.
- Maintenance of market balance through arbitrage opportunities, ensuring steady financial growth even in stagnant market conditions.
These distinctive characteristics make balanced advantage funds a compelling choice for investors looking to mitigate equity investment risks while aiming for long-term financial growth and stability.