Mutual funds that invest over 65% of their assets in stocks and the remaining portion in debt instruments to generate strong overall returns are considered the best-balanced advantage funds. While investments in debt instruments yield fixed returns, those in stocks and shares provide market-linked rewards. Before investing in balanced mutual funds, investors are urged to search for the best-balanced funds. Below is a list of the best-balanced advantage funds.
What are Balanced Advantage Funds?
Hybrid funds that invest across a variety of asset classes are called Balanced Advantage Funds. The fund manager chooses the asset allocation for the fund based on the investment goal of the fund. In general, the fund increases its exposure to equities when valuations are low and decreases it when valuations are high. The fund rebalancing is not biased by sentiment and is supported by appropriate research and quantitative analysis.
Balance trends-driven investments. Having a target asset mix for investments is not necessary for Advantage funds to cater to novice and low-risk investors by minimizing risk through market DAA. As a result, the fund manager can rebalance with a great deal of flexibility. Balance Advantage funds’ performance is contingent on the manager’s ability to make decisions as well as the state of the market.
Best Balanced Advantage Funds to Invest in 2023
| Balanced Advantage Funds | Annualized Returns in the Last 5 Years |
| HDFC Balanced Advantage Fund-Direct Plan-Growth | 13.20% |
| Edelweiss Balanced Advantage Fund-Direct Plan-Growth | 12.00% |
| ICICI Prudential Balanced Advantage Fund-Direct Plan-Growth | 10.40% |
| Nippon India Balanced Advantage Fund-Direct Plan-Growth | 10.30% |
| Sundaram Balanced Advantage Fund-Direct Plan-Growth | 10.05% |
Performance of the Best 5 Balanced Advantage Funds (2023)
HDFC Balanced Advantage Fund (IDCW): The hybrid mutual fund scheme HDFC Balanced Advantage Fund (IDCW) was introduced by HDFC Mutual Fund. 10.1% of the fund’s corpus is invested in cash, 24.5% in debt, and 63.2% in stocks. Investors looking for relatively equal exposure to the debt and equity markets might consider this strategy. The following details pertain to the plan:
- Launch Date: 11 September 2000
- NAV: ₹344.60
- AUM: ₹51,042.46 Cr
- Expense Ratio: 0.87%
- Minimum Investment: SIP ₹100, Lump Sum ₹100
Edelweiss Balanced Advantage Fund: The hybrid fund Edelweiss Balanced Advantage Fund seeks to deliver returns similar to those of equities but with less volatility. According to Edelweiss Mutual Fund, clients with a longer investment horizon than three years should choose this fund. Let’s examine the specifics of the plan:
- Launch Date: 20 August 2009
- NAV: ₹40.02
- AUM: ₹8,780.20 Cr
- Expense Ratio: 0.51%
- Minimum Investment: SIP ₹500, Lump Sum ₹5000
ICICI Prudential Balanced Advantage Fund: Investors who want to profit from fluctuating market conditions by adjusting the proportion of debt to equity may consider this plan. The fund firm states that investors with a three-year investment horizon or longer should consider this strategy. The specifics of the ICICI Prudential Balanced Advantage Fund plan are as follows:
- Launch Date: 30 December 2006
- NAV: ₹57.78
- AUM: ₹44,515.75 Cr
- Expense Ratio: 0.91%
- Minimum Investment: SIP ₹100, Lump Sum ₹500
Nippon India Balanced Advantage Fund: The plan aims to reduce risks and market volatility while maximizing potential gains in equity markets by actively managing the portfolio through equity investments, loans, money market instruments, and derivatives. Let’s look at the Nippon India Balanced Advantage fund‘s details:
- Launch Date: 15 November 2004
- NAV: ₹137.95
- AUM: ₹6,593.56 Cr
- Expense Ratio: 0.74%
- Minimum Investment: SIP ₹100, Lump Sum ₹100
Sundaram Balanced Advantage Fund: The Sundaram Balanced Advantage fund is appropriate for those with modest risk tolerance who want to invest in a scheme that will dynamically manage the distribution of its assets among debt, equities, derivatives, and REITs to generate income and capital growth. Let’s examine the specifics of the plan:
- Launch Date: 16 December 2010
- NAV: ₹29.33
- AUM: ₹1,532.50 Cr
- Expense Ratio: 0.60%
- Minimum Investment: SIP ₹100, Lump Sum ₹100
How to Invest in Best Balance Advantage Funds?
Investing paperlessly and easily is possible with different brokers. To begin investing, simply follow the instructions below.
- Choose a plan: Select an investment strategy to begin investing.
- Create an Account: Open an account to make investments in Best Balance Advantage Funds using a paperless approach.
- Invest online & transfer: Invest using a SIP (eNACH mandate), UPI, or net banking.
- Track your investments: Using the dashboard, you can monitor, increase your investment, and take money out of it.
Importance of Balanced Advantage Funds
Diversification: ‘Don’t put all your eggs in one basket’. Never put all of your money into one asset as an investor. Better results can be achieved through diversification. That is what Balance Advantage funds do. These are available for purchase by investors who wish to diversify their holdings. Given their sufficient exposure to both debt and equities, these are most appropriate for long-term investors with low-risk appetites.
Better Returns: Due to the diverse asset classes in which Balance Advantage funds invest, market fluctuations have little impact on their performance. These funds are therefore believed to offer greater returns than riskier investments.
Volatility: No asset class can sustain an extended period of either an upward or downward trend. There’s always a downturn after a peak, and vice versa. Balance Advantage funds are less volatile since they make investments across a range of asset classes. Though their decrease isn’t as steep, Balance Advantage funds don’t offer returns as high as pure stock funds because of their genuine variety, which mitigates the impact of volatility.
Conclusion
When looking for a balanced portfolio, risk-averse investors could consider investing in Balanced Advantage Funds. These funds reduce volatility through a variety of debt and equity investments, which makes them the best-balanced advantage funds for long-term investors seeking consistent returns and low risk. Balanced Advantage Funds are a great addition to investment portfolios because of their lower volatility, greater returns, and relevance of diversity.
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