Best Balanced Advantage Funds to Invest in India with Prakash72
Balanced Advantage Funds, also known as Dynamic Asset Allocation Funds, are the mutual funds with the ability to switch between equity and debt investments to the best advantage of the investor. This blog identifies some of the top Balanced Advantage Funds of the year to invest in.
Top Dynamic Asset Allocation Funds
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Features of Balanced Advantage Funds
Diversification
Top Balanced Advantage Funds are a flexible kind of Hybrid Mutual Funds with at least 65% in equity and equity-related instruments and the rest in debt. This allows investors to take exposure to both asset classes.
Dynamic Asset Allocation
The top Balanced Advantage Mutual Fund managers have the freedom to keep shifting the funds between equity and debt as per the market conditions. Thus, these funds are capable of generating the highest possible returns. When the markets are low, the funds are moved into debt securities to secure fixed-interest. On the contrary, when the markets are expected to grow, the funds are moved into equity to make profits from rising market prices.
Risk Factor
Balanced Advantage Mutual Funds carry lower risk than pure Equity Funds however at the same time allow investors to take exposure and benefit from equity returns as well.
Fund Categories
Hybrid
Dynamic Asset Allocation
Equity Savings
Arbitrage Fund
Aggressive Hybrid Fund
Balanced Hybrid Fund
Multi Asset Allocation
Conservative Hybrid Fund
Debt Mutual Funds
Medium Duration Fund
Overnight Mutual Fund
Low Duration Fund
Dynamic Bond
Gilt Fund with 10 year constant duration
Long Duration Fund
Short Duration Fund
Money Market Fund
Gilt Fund
Corporate Bond Fund
Floater Fund
Medium to Long Duration Fund
Ultra Short Duration Fund
Banking and PSU Fund
Credit Risk Fund
Equity
Focused Fund
Flexi Cap Fund
Mid Cap Funds
Multi Cap Funds
Large Cap Funds
Small Cap Fund
Large & Mid Cap Funds
Sectoral Thematic
Value Fund
Sectoral Thematic
Credit Risk Fund
Dividend Yield Fund
Contra Fund
Solution Oriented
Retirement Fund
Children Fund
Other
Index Funds
FoFs
How to Invest in a Balanced Advantage Mutual Fund with Prakash72?
Any investor can enjoy the benefits of investing through Prakash72 in the following easy steps:
Step 1:
Create an account in Prakash72 by providing your basic KYC details. (If you already have an account, then just log in to your account.)
Step 2:
On your portfolio page click on the Buy New tab at the top right corner of the screen. Select the category and choose the funds you want to purchase. If you already know the name of the fund you want to buy, then you can search for the particular fund through Quick Order.
Step 3:
Select the category and choose the funds you want to purchase.
Step 4:
If you already know the name of the fund to buy, then you can search for the particular fund through Quick Order.
Step 5:
Fill in the transaction details and confirm. You can place up to 5 orders in one go.
Step 6:
You can make payment through your registered account using UPI, Direct Pay, or NEFT/RTGS, Bank Mandate, or Cheque. For same-day NAV, select UPI, Direct Pay, or NEFT/RTGS, as other payment options may take a few days to clear.
Nodal account takes about 1–2 days to clear payment from the approved mandate, and cheques take about 2–5 days in clearing, due to which you may not get the same-day NAV.
Why Should You Invest in Balanced Advantage Funds?
The best performing Dynamic Asset Allocation Funds derive their benefits from its unique composition of Equity and Debt portfolio. Since major investment is into equity with balance in debt, these funds offer distinctive advantages of its own:
- Higher Returns: These funds have the potential to offer higher returns among other Hybrid Funds such as Conservative Hybrid which are more debt orientated. The fund managers are permitted to move funds between various securities which allows them to reap the benefits of market conditions.
- Risk Reduction: Due to the fact that these funds always have a certain amount of funds allocated towards debt the risk of the overall fund reduces as the debt component protects investors when markets turn adverse.
- Rebalancing of Portfolio: The mutual fund managers constantly keep moving the funds between equity and debt as they feel the need after studying the market conditions. So, this gives the investors protection against adverse market conditions.
For Whom are Balanced Advantage Funds Suitable?
Balanced Advantage Funds are suitable for investors looking for long term investment avenues with high return expectations. Since the funds are invested primarily into equity, these funds have high-earning potential by way of long-term wealth generation. At the same time, Dynamic Asset Allocation Funds offer stability and protection since they are backed by a team of highly-specialised mutual fund managers who monitor the market conditions constantly and keep moving the funds between equity and debt as per the requirement. Risk averse investors may not prefer to invest in Balanced Advantage Funds because these funds are riskier as compared to other mutual fund schemes such as Conservative Hybrid or pure Debt Mutual Funds since major investment is into the equity sector.
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Frequently Asked Questions (FAQs):
1. How Long Should I Stay Invested in Balanced Advantage Funds?
There is no defined ideal investment period for these funds. However, it is suggested to invest for a longer duration, preferably more than 3 years, to reap the benefits of long-term wealth generation from equity investment. In the short-term, these funds may perform at par with other Hybrid Funds.
2. What Kind of Returns can I Earn from Balanced Advantage Funds?
Balanced Advantage Funds offer moderate returns in both stable and volatile market conditions due to the fact that fund managers have the freedom to change asset allocations as per the prevailing market conditions. These funds offer an average of 10-12% returns.
3. Where do Balanced Advantage Funds Invest?
The best performing Dynamic Asset Allocation, aka Balanced Advantage Funds invest in both equity and debt securities for maximisation of returns. However, there are no restrictions on the quantum of equity or debt investment. Equity investment can be as high as 90% of the total portfolio value, when the market is expected to go up. The funds are generally invested in high performing stocks of blue-chip companies. The debt investments are into bonds or other government securities and money market instruments.
4. Taxation on Balanced Advantage Funds?
Capital gains on redemption of units of Balanced Advantage Funds are taxed on the basis of the holding period.
Short-Term Capital Gain Tax (STCG): Short Term Capital Gains accrue on redemption before one year, and the profits are added to the investor’s income and taxed according to their tax slab.
Long Term Capital Gain Tax (LTCG): For holding periods longer than one year, Long Term Capital Gains are applicable, and are taxed at a flat rate of 10%.
Dividends earned on equity investments, the benefit of which is passed on to the investors by mutual funds, are taxable at normal slab rates in the hands of investors.
5. Minimum Investment Required in Balanced Advantage Funds?
It is widely held that one can start investing in all kinds of Mutual Funds with as little as INR 500 lump sum onwards. Investors can also opt for the Systematic Investment Plan (SIP) route and start as low as INR 100 per month.