Is it safe to invest in Balanced Advantage fund? (2024)

Is it safe to invest in Balanced Advantage fund?

However, they also have some risks such as market risk, model risk, and fund manager risk. Therefore, you should invest in balanced advantage funds only if you understand their working and are comfortable with their risk-return trade-off.

How safe is balanced advantage fund?

Ideal for Beginners: Balanced funds can be excellent investment vehicles for first-time investors who lack expertise in the equity market and are often risk-conservative. One also need not worry about asset allocation because these funds are managed by professionals.

What are the drawbacks of balanced advantage funds?

Most of the balanced funds usually under-perform equity mutual funds especially during bull market as a part of their fund still remains allocated to debt funds. This restricts balanced funds from taking full advantage of equity Bull Run and investors have no other option but to live with mediocre returns.

Should one invest in balanced advantage fund?

These funds have been able to contain the downside using different strategies and have given decent returns with much less volatility. Therefore, if you are looking for a long-term investment with lower volatility than that in a pure equity fund, you can consider balanced advantage funds.

Are balanced funds good for retirees?

That can be good if you need stability, but this approach also reduces your long-term returns, since stocks tend to deliver much higher returns over time. So balanced funds may be better for those who need stability rather than the highest levels of returns, making them more suited to older investors.

Who should invest in balanced advantage funds?

Investors who have a long-term investment horizon may consider investing in balanced advantage funds. Therefore, the best balanced mutual fund to invest in can be a balanced mix of equity and debt instruments, which helps to provide stability to the portfolio over the long run.

What is the average return of balanced advantage fund?

1. Current NAV: The Current Net Asset Value of the HDFC Balanced Advantage Fund as of Mar 15, 2024 is Rs 444.03 for Growth option of its Regular plan. 2. Returns: Its trailing returns over different time periods are: 20.65% (1yr), 25.22% (3yr), 14.07% (5yr) and 18.09% (since launch).

What is the difference between a balanced fund and a balanced advantage fund?

Balanced Funds are treated as non-equity (debt) funds since the equity exposure is less than 65%. Balanced Advantage Funds are treated as equity funds since total equity levels are always maintained above 65% by way of including allocation to equity derivatives.

Why is balanced advantage fund good?

Balanced advantage funds usually reduce equity and increase fixed income allocations when equity valuations are high. They will increase equity and reduce fixed income allocations when equity valuations are low. These funds use quantitative dynamic asset allocation models to change their asset allocation.

Is it safe to invest lumpsum in balanced advantage fund?

Lumpsum investment in a balanced fund is definitely a very good option for an investor since it provides a very good opportunity for an investor to diversify their investment and get a good taste of funds from different sectors. Balanced funds are the ones in which there is mix of both debt and equity funds.

Why does Dave Ramsey recommend mutual funds?

Why are mutual funds the only investment option Ramsey Solutions recommends? Well, we like mutual funds because they spread your investment across many companies, and that helps you avoid the risks that come with investing in single stocks and other “trendy” investments (we're looking at you, Dogecoin).

Which balanced advantage fund is best?

Frequently Asked Questions
Fund NameFund Category5 Year Return (Annualized)
Tata Balanced Advantage FundHybrid14.65 % p.a.
Edelweiss Balanced Advantage FundHybrid15.53 % p.a.
Sundaram Balanced Advantage FundHybrid13.44 % p.a.
ICICI Prudential Balanced Advantage FundHybrid13.27 % p.a.
1 more row

Which is the best balanced advantage fund for monthly dividend?

HDFC Balanced Advantage Fund

It is a fund with Moderately High risk and has given a CAGR/Annualized return of 5.8% since its launch. Ranked 23 in Dynamic Allocation category. Return for 2023 was 31.3% , 2022 was 18.7% and 2021 was 26.4% .

Where is the safest place to put your retirement money?

The safest place to put your retirement funds is in low-risk investments and savings options with guaranteed growth. Low-risk investments and savings options include fixed annuities, savings accounts, CDs, treasury securities, and money market accounts. Of these, fixed annuities usually provide the best interest rates.

What should a 70 year old retiree asset allocation be?

At age 60–69, consider a moderate portfolio (60% stock, 35% bonds, 5% cash/cash investments); 70–79, moderately conservative (40% stock, 50% bonds, 10% cash/cash investments); 80 and above, conservative (20% stock, 50% bonds, 30% cash/cash investments).

Which mutual fund is best for senior citizens?

Best Mutual Funds for Senior Citizens
Best mutual fund for senior citizenNAVMinimum SIP amount
HDFC short term Debt Fund Direct Plan-GrowthRs. 26.68Rs. 100
Kotak Debt Hybrid Fund Direct GrowthRs. 49.49Rs. 1000
SBI Bluechip Direct Plan GrowthRs. 69.40Rs. 500
SBI Conservative Hybrid Fund Direct GrowthRs. 59.81Rs. 500
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Nov 10, 2023

Are balanced funds high risk?

Who can invest in balanced funds? These funds suit investors with a moderate risk tolerance who want to obtain inflation-beating returns and protect their retirement savings. It is also suitable for Long-term investors in higher tax brackets who are considering allocating a part of their portfolio to these funds.

What is one advantage and one disadvantage of a balanced fund?

Balanced funds are comparatively low-risk investments compared to equity mutual funds, but they are not 100% risk-free. The debt components of balanced funds are subject to credit and interest rate risks.

Which is better equity or balanced fund?

Balanced funds may be more suitable for new investors who want to get a hang of the mutual funds market and earn a steady stream of money, but do not want to take a high risk right away. Equity funds are better for people who want moderate-to-high risk investment and aim for greater short-term profits.

Which is better balanced advantage fund or multi asset fund?

If you are a new investor or are risk-averse, go for balanced advantage funds. Multi asset allocation funds can be a convenient option but do assess whether you need to invest in gold or not and if yes, do explore other gold-related investment options.

What is the tax rate on balanced advantage fund?

Taxation of Balanced Advantage Funds

Short-term capital gains are taxed at 15%, plus cess and surcharge. Long-term capital gains up to Rs 1 lakh are tax-exempt; any gains above Rs.

Is Balanced Advantage fund equity or debt?

These are hybrid mutual funds with allocation to equity and fixed income instruments in a ratio that keeps changing according to the market conditions.

What is the disadvantage of balance funds?

Disadvantages of Balanced Funds

The characteristic allocation of a balanced fund—usually 60% equities, 40% bonds—may not always suit an investor's financial goals since needs and preferences can change over time.

Are balanced advantage funds tax free?

Taxation of balanced advantage funds (equity-oriented)

Gains earned from equity funds with a holding period of more than a year are considered long-term capital gains and taxed at 10% on gains exceeding Rs 1 lakh in a financial year.

What are the rules for balanced advantage funds?

Answer: As per SEBI, balanced funds must have 50% to equity and 50% allocation to fixed income instruments (debt and money market). There are no asset allocation limits for balanced advantage funds e.g. the un-hedged equity exposure of a balanced advantage fund can be lower than 50%.

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