Understanding Balanced Advantage Funds

Ratin Biswass / 27 Nov 2025/ Categories: DSIJ_Magazine_Web, DSIJMagazine_App, Letters to Editor, MF - Letter to Editor, Mutual Fund

Could you explain balanced advantage funds in detail and highlight their key advantages?

Could you explain balanced advantage funds in detail and highlight their key advantages? - Shakti Kumar[EasyDNNnews:PaidContentStart]

Editor Responds : Balanced Advantage Funds (BAFs) are dynamic hybrid schemes that automatically shift between equity and debt based on market valuations. When markets are attractive, they increase equity exposure to capture growth; when valuations rise, they move towards debt to protect capital. This disciplined, model-driven approach reduces the need for investors to time the market and helps manage volatility more effectively. Key advantages include smoother returns, lower drawdowns, and equity-like Tax efficiency. BAFs are ideal for first-time equity investors and those with moderate risk appetite who prefer a balanced yet growth-oriented strategy. They offer diversification, stability during uncertain phases, and long-term wealth creation potential. Overall, BAFs serve as an all-weather investment solution that adapts intelligently to changing market cycles. We will be covering this topic in detail in our upcoming issue. Stay tuned.

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