LIC Balanced Advantage Fund is an open-ended dynamic asset allocation scheme.
Good to know Balanced Advantage FundA balanced advantage fund (BAF) is a type of hybrid mutual fund scheme which invests in equity as well as debt. These funds keep on changing their allocation based on the market conditions. Also, they are actively managed and aim to diversify risks by investing across asset classes. |
Investment objective
The fund aims for capital appreciation over a long period by adopting a dynamic asset allocation strategy. It will invest across asset classes like equity, debt and money markets.
By investing in this fund, investors will get exposure to a well-diversified portfolio with a margin of safety. Also, the portfolio will be constructed in a manner that protects the downside by reducing the impact of drawdowns. Along with this, it aims to participate in the upside through dynamic asset allocation.
The asset management company has come up with a model that will determine the asset allocation of this fund. For deciding the asset split, the fund will look at various macro and micro factors such as interest rates and future earnings. The back testing of the fund’s model reveals that this scheme would have given around 15% return over the last ten years through the SIP route.
So, simply put, the fund will aim to generate near equity returns with relatively low volatility.
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Asset allocation
| Instrument | Allocation (% of total assets) | Risk profile | |
| Minimum | Maximum | ||
| Equities and equity-related instruments | 0 | 100 | High |
| Debt and money market instruments | 0 | 100 | Low to medium |
| Units issued by REITs and InvITs | 0 | 100 | Low to medium |
Scheme details
| Name | LIC Balanced Advantage Fund |
| Type | An open-ended dynamic asset allocation fund |
| Category | Balanced Advantage |
| Benchmark | LIC MF Hybrid Composite 50 : 50 Index |
| Entry/exit load | Entry: Nil Exit Load: Nil Before 12 months: 1% After 12 months: Nil |
| Fund Manager | Yogesh Patil (Equity portion) Rahul Singh (Debt portion) |
| Minimum application amount | ₹5,000 and in multiples of ₹1. |
| Expense ratio | Up to 2.25% |
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| This product is suitable for investors who are seeking*: | Riskometer |
| -Capital appreciation over a long period of time.-Investments in a dynamically managed portfolio of equity and equity related instruments, debt and money market instruments. |
*Investors should consult their financial advisors if in doubt about whether the product is suitable for them.
Note: The above information has been sourced from the Scheme Information Document provided by LIC Asset Management Company. To read the entire document, click here.
Disclaimer: The above article is purely academic in nature and aims to provide knowledge about basic trading concepts & should not be construed as an opinion or advice to invest or trade. RKSV Securities India Private Limited (brand name Upstox) is the distributor of the mutual fund. Mutual fund investments are subject to market risks; please read all the related documents and/or consult your investment advisor before investing. Past performance of an investment asset does not guarantee future returns.
Mutual fund investments are subject to market risks, read all scheme related documents carefully.