Choosing a\nworthy mutual fund rightfully is so essential for investment, particularly when\nthere are multiple unfavourable headwinds at play that all point\nto troubled times of the economy. <\/p>\n\n\n\n
Equity markets are undergoing roller coaster swings; and as for the debt markets, the credit crisis cracks are deepening. Apparently taking prudent decisions becomes even more imperative then, as one bad fund investment<\/a> can stagnate or lower your chances of good gains. <\/p>\n\n\n\n Have you considered an option of Balanced\nAdvantage Fund for investment?<\/strong><\/p>\n\n\n\n Probably,\nnot? I guess!<\/p>\n\n\n\n Let me\nexplain to you why you should consider it.<\/p>\n\n\n\n Initially, a Balanced Advantage Fund, was a subset of balanced funds. But, since the re-categorisation of mutual funds<\/a>, this is a newly formed sub-category of an open-ended hybrid fund. <\/p>\n\n\n\n [Read<\/strong>: Aggressive Hybrid Fund or Balanced Advantage Fund, Which Is A Better Option?<\/a>]<\/p>\n\n\n\n According to SEBI’s\nre-categorisation norms, balanced advantage funds are\nhybrid funds that are managed dynamically. In simple words, hybrid funds\nshuffle their equity-debt asset allocation based on prevailing market valuation\nand sentiment in each asset class. <\/p>\n\n\n\n The best aspect of balanced advantage funds is\nthe flexibility to invest up to 100% of their corpus in either debt or equity with the aim of generating better returns by\noptimally and dynamically shifting the allocation of their portfolio in each\nasset class to get the best of both worlds as well as to mitigate the risk\nthese funds carry\/have. Whenever necessary, to capture potential gains it\nuses arbitrage opportunities as well. <\/p>\n\n\n\n How have the funds fared over the years<\/strong>? Table 1: Performance over\ndifferent years<\/em><\/strong><\/p>\n\n\n\n
\nFrom the performance table below, one can see that performance of ICICI Pru Balanced Advantage Fund, HDFC Balanced Advantage Fund and\nReliance Balanced Advantage Fund has been better or in line with benchmark\nindex over 2-year, 3-year, and 5-year time frames. <\/p>\n\n\n\n