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Balanced Advantage Funds

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Balanced Advantage Funds constantly endeavour to optimise your equity investments to suit the prevailing market situation, with an aim to reduce downside risk and help you Keep your investments on the right track!

One of the deterring factors while investing in equities has been the inherent volatility leading to unpleasant investment experience to the investors. While the ideal way to invest is buying when the markets are low and sell when the markets are close to their peak. However, the investor comes in when the markets have already risen and sell when there is some correction or crisis. This is called emotional/behavioural bias. Balanced Advantage Funds helps in addressing this issue and aim to provide better investment experience.

What are Balanced Advantage Funds?

These funds attempts to reduce volatility associated with equity investments while generating long term alpha. They invest in a combination of equity, debt and arbitrage portfolio. The equity portion is managed dynamically depending on the market valuations and momentum.

3-in-1 fund

​​​​Balanced Advantage Funds may be considered to be three funds rolled into one. When valuations become expensive the fund’s equity allocation reduces significantly. In such market conditions, the fund resembles a conservative hybrid fund. When the market becomes fairly valued, the fund raises its allocation to equities, thereby resembling an aggressive hybrid fund. And when market valuations decline, it raises its allocation to equities substantially. At such times, it resembles an equity fund. Thus, it can be viewed as a three-in-one product, with the added benefit of being taxed like an equity fund.

Balanced Advantage Fund’s ability to perform in all market conditions makes it a very good fund for investors with low to moderate risk appetite, who have invested in traditional investment avenues all their lives but now want a moderate taste of equities. This is a fund for investors who don’t want to be bothered about questions such as: the market has risen (or fallen), should I book profit or stay put? The fund takes care of all these issues on investors’ behalf.

Tax Advantage

​​Long term Capital Gain shall be computed without considering indexation benefit and such long-term capital gains is taxable at the rate of 10% as per provision of Section 112A of The Act. Further, Threshold benefit of Rs. 1,00,000 available on such long term capital gain.

Short-term capital gains is taxable at the rate of 15 per cent as per provision of Section 111A of The Act.