Balance advantage funds ride on popularity and investor’s confidence.
Since the last 24 months, equity was rising and valuations remained costly. There was an inherent fear among investors that markets might crash.
The fund managers advised everyone to stay invested.
So when the balanced funds started performing well, they witnessed a rise in price to earnings and price to book parameters. Balanced Advantage Funds (BAF) are dynamic asset allocation funds which switch between equity and debt based on quantitative parameters, thus containing the volatility.
During that period, fund managers converted that money into debt. So if they were investing 85 per cent earlier to generate alpha in the equities, the new trend was to reduce the exposure by 10–15 per cent and manage it with 65 per cent in equity and 35 per cent in debt.
This was a good strategy, since the interest rates were falling.
When the interest rates fall, the price of the bonds go up, this results in an investor making capital gains. This was the reason for attractiveness for BAF, which suddenly saw its popularity going up.
“The fund with its auto-rebalancing mechanism alleviates need for regular portfolio shifts based on changing market conditions. Hence, the fund can be included as a part of core investment portfolio of any investor. We believe the product is well suited for investors with a moderate risk appetite and medium to long-term investment horizon,” says Manish Gunwani, CIO-Equity Investments, Reliance Nippon Asset Management.
This way the investor does not need to constantly track the fund or take calls on rebalancing between equity and debt, based on the market movement.
هذه القصة مأخوذة من طبعة September 2018 من Outlook Money.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 8500 مجلة وصحيفة.
بالفعل مشترك ? تسجيل الدخول
هذه القصة مأخوذة من طبعة September 2018 من Outlook Money.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 8500 مجلة وصحيفة.
بالفعل مشترك? تسجيل الدخول
THREE STOCKS MFs WENT BANANAS OVER
When you invest in mutual funds, you are indirectly investing in stocks. So, we decided to find out which are the stocks most mutual funds in the equitylinked savings scheme, flexi-cap, multi-cap and large-and-mid-cap categories invest in. We analysed 149 funds that have a broad mandate to invest in a wide array of stocks and came up with the three stocks that most mutual funds invest in
5 Tricky Travel Questions, And 1 Foolproof Travel Plan
Now that you have finally bid goodbye to your worklife, you have all the available time at your disposal to satiate your travel bug. But before you set sail on your wanderlust, here are a few things you should keep in mind
Save As Per The Corpus You Need
I am 29. I started investing in mutual funds (MFS) two years ago. I invest ₹2,000 each in three equity funds-multicap, focused equity and multi asset allocation-every month.
Short Selling
The capital markets regulator, the Securities and Exchange Board of India (Sebi), recently issued a new circular which said that while placing orders, institutional investors will have to inform in advance whether the transaction is short selling or not. The order also said that retail investors would be allowed to make similar disclosures till the end of trading hours on the day of the transaction.
Mind Exclusions Before Buying Policy
I am a 29-year-old software engineer. I got married a year and a half ago and currently reside with my parents.
HOW AVERAGES CAN RUIN THE MATH
Calculating a retirement corpus on the basis of average returns can have disastrous consequences as different sequence of returns can lead to different outcomes
Calls For Urgent Action As India Braces For Dementia Crisis
As the ageing population grows, the threat of Alzheimer's disease has also spiked, drawing attention to whether India is prepared to provide the medical support it calls for.
ANNUAL REPORT CARD
The Indian equity market is in an upbeat mood, and almost all the funds in the OLM 50 list are among the top five funds in their respective categories in terms of performance.
Don't Just Blindly Follow Maxims
The given investment maxims have proven relevant most of the time, but they are not carved in stone. Investment strategies should be tailored to individual situations
IS YOUR fund FARING WELL?
Outlook Money's India's Best Funds 2024 issue aims to empower you with valuable insights and analysis, to help you make informed decisions on the funds you already own or the ones you plan to invest in