Dynamic Asset Allocation strategy for all seasons

Dynamic asset allocation is a strategy that is in vogue when markets trade volatile.

Dynamic asset allocation is a portfolio management strategy that involves rebalancing a portfolio so as to maximise gains at minimum risks.

Such a strategy would involve selling stocks in best performing asset-class and adding stocks in underperforming assets.  The ultimate objective in the strategy is to reduce the volatility risk and beat the benchmark returns.
SBI Dynamic Asset Allocation Fund is one such fund that adopts an active portfolio management strategy and attempts to beat its benchmark returns. The fund has assets under management of almost Rs 143.93 crores. The 1 year returns for the fund stand at an impressive 13 per cent. The benchmark index for the fund is Sensex. Sensex has delivered almost 9 per cent over a 1-year period. Over six months the fund has delivered almost seven per cent.
The fund’s objective is to provide investors with an opportunity to invest in a portfolio of a mix of equity and equity related securities and fixed income instruments.
 
Nidhi Chawla and Dinesh Balachandran are the portfolio managers for the fund. The expense ratio for the fund stands at 2.37 per cent.
 
Top holdings in the mutual fund portfolio are HDFC Bank, HDFC, Infosys and Reliance Industries.
 
Investors can look at dynamic asset allocation strategy in current market scenario. One should choose a fund with a good track record before putting his or her hard earned money in the fund.