While both equity and debt markets have gone through extreme turbulence, many fund houses have sought balanced advantage funds as a resolution to combat the volatility and capitalise on the gains.<\/p>\n\n\n\n

Equities have finally rallied up on account of the recent corporate tax rate cut, which boosted the Inc.’s earnings of several heavyweights of bellwether index-the Nifty 50-which were in- line with street expectations or have beat the estimates, in turn to reviving the market sentiment, However, the probable volatility going forward cannot be ruled out.<\/p>\n\n\n\n

And in the debt markets, the ripple effect of downgrading on account of defaulters has eroded investors’ hard-earned money and disappointed them.<\/p>\n\n\n\n

Hence there is a growing need for balanced funds, as the investment climate of both the prime asset classes have become uncertain. This raises the pertinent question, is there a way out for investors?<\/p>\n\n\n\n

Few fund houses have launched Balanced Advantage Fund<\/a>, an open-ended scheme that is a sub-category of hybrid funds, which was originally a subset of balanced funds. But, since the re-categorisation of mutual funds<\/a>, this was a newly formed category.<\/p>\n\n\n\n

The balanced advantage\/dynamic asset allocation fund mitigates the risk by dynamically managing the allocation between equity and debt as per the prevailing market valuation and sentiment in each asset class. If need be, it captures potential gains by using arbitrage opportunities.<\/p>\n\n\n\n

ITI Mutual Fund<\/a>\u00a0is no different. It launched ITI Balanced Advantage Fund (ITIBAF), an open-ended balanced advantage \/ dynamic asset allocation fund that is a sub-category of hybrid funds. It aims to optimise on equity and debt investment to give the best of both worlds.<\/p>\n\n\n\n

[Read:\u00a0<\/strong>\u00a0Why Comparing Returns to Risk Is More Meaningful!<\/a>]<\/p>\n\n\n\n

ITIBAF has the flexibility to vary its equity exposure between 0%-100%. But under normal circumstances, it aims to allocate its assets between 65% -100% in equities, equity related instruments. Plus, it will have exposure to money market instruments (including cash and reverse repo), debt instruments with residual maturity up to 3 years, and units issued by REITs and InvITs.<\/p>\n\n\n\n

In terms of the risk-return matrix, this scheme is placed at moderate-risk, moderate-return investment proposition.<\/p>\n\n\n\n

Table 1: Details of ITI Balanced Advantage Fund<\/em><\/strong><\/p>\n\n\n\n