Dynamic Asset Allocation funds are hybrid funds that invest across asset classes including Equity, Debt, Equity Derivatives, Real Estate. These funds deliver a balanced risk with growth over the long term.
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Top Best Balance Advantage Funds for long-term growth
Till Date CAGR
|Edelweiss Balanced Advantage Fund (G)|
|HDFC Balanced Advantage Fund (G)|
|ICICI Prudential Balanced Advantage Fund (G)|
|Baroda BNP Paribas Balanced Advantage Fund (G)|
|Kotak Balanced Advantage Fund (G)|
|Union Balanced Advantage Fund (G)|
|Nippon India Balanced Advantage Fund (G)|
|Aditya Birla Sun Life Balanced Advantage Fund (G)|
|DSP Dynamic Asset Allocation Fund (G)|
|HSBC Balanced Advantage Fund (G)|
|Bandhan Balanced Advantage fund (G)|
|Axis Balanced Advantage Fund (G)|
|Motilal Oswal Balance Advantage Fund (G)|
|Invesco India Dynamic Equity Fund (G)|
|Sundaram Balanced Advantage fund (G)|
|Bank of India Balanced Advantage fund (G)|
|Tata Balanced Advantage Fund (G)|
|BNP Paribas Dynamic Equity Fund (G)|
|LIC MF Balanced Advantage Fund (G)|
|Franklin India Dynamic Asset Allocation Fund Of Funds (G)|
Dynamic Asset Allocation (DAA) funds or Balanced Advantage Funds are hybrid funds that invest in a mix of asset classes. They usually invest in Equity, Debt, Equity Derivatives, Real Estate, etc. and are managed dynamically. Based on the investment objective of the fund, the fund manager determines the asset allocation for the fund. He actively monitors the investments and rebalances the portfolio based on the market conditions to keep it in line with the investment objective. Generally, when the valuations are low, the fund increases its equity exposure, and when valuations are high, lowers the equity exposure. The fund rebalancing is backed by proper research and quantitative analysis and is not subject to emotional bias.
Balance Advantage funds invest in a way that minimizes risk based on market trends, and are targeted at first time and low-risk appetite investors. DAA doesn’t involve having a target investment mix of assets. Therefore, the fund manager has a high degree of flexibility while rebalancing. The success of Balance Advantage funds depends not just on market conditions but also on the manager’s decision-making ability.
|Fund Name||Returns Since Inception||Expense Ratio|
|ICICI Prudential Balanced Advantage Fund (G)||11%||1.57%|
|HDFC Balanced Advantage Fund (G)||18.10%||1.80%|
|Axis Balanced Advantage Fund (G)||7.30%||2.04%|
|IDFC Balanced Advantage fund (G)||7.60%||1.93%|
|SBI Balanced Advantage Fund (G)||5.7%||1.66%|
As Balance Advantage funds invest in more than one asset class, they are designed for risk-averse investors. Long term investors who understand the risk-return trade off and want a way to balance the Equity-Debt exposure in their portfolio might consider these investment options. As the fund manager himself will take care of the asset allocation during volatility, the investor need not worry about their investment.
Though equity investments are risky, they beat inflation in the long term, and debt investments earn guaranteed returns. Balance Advantage funds fill the gap and offer investors a solution that is designed to balance risk with good growth over the long term.
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Indian markets can be quite volatile. Any national and international news causes considerable volatility in the market. Be it political unrest in the country or Brexit or USA China tariff wars; everything affects the Indian market.
Dynamic asset allocation strategy best suits markets that are highly volatile. It is practically impossible to time a volatile market. Investing in pure equity or debt can be challenging. This strategy strikes a balance between risk and returns with lower drawdown than a pure equity investment and higher return than a pure debt investment.