Balanced Advantage Fund or Dynamic Asset Allocation Fund belongs to the category of Hybrid Mutual Fund Schemes. These funds primarily invest in asset classes like Equity and Debt.
Advantages Of Investing In BAF
The prime advantage of investing in the Balanced Advantage Funds or Dynamic Asset Allocation Funds is that the fund manager can keep changing the allocations based on the market returns in order to ensure optimum performance of the fund and generate maximum returns.
It’s the tactical allocation of the balanced advantage funds that gives it the added advantage and makes it the preferred choice of the investors.
Compared to the equity market, the Balanced Advantage Funds might not outperform the benchmark during the rising market, but these funds definitely take care of downside risk. However, in the falling market, the debt exposure of these funds may enable them to outperform the benchmark.
Though the balanced advantage funds or dynamic asset allocation funds are known for their balance between risks and returns, the investors should always remember that no matter what, while investing in such funds market risk is always present.
So, anyone who wishes to do tactical asset allocation, is ready to take a moderate to a high level of risk and is ready to invest for a long term may consider investing in the balanced advantage funds or dynamic asset allocation funds.
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