All About Balanced Advantage Funds


Finding the right balance in everything you do can be very important in life. The same can be said for investing. The balance between risk and reward and different asset classes can be a suitable way to build wealth. And balanced advantaged funds provide just this. If you are looking for a balance between equity and debt, balanced advantage mutual funds can be an ideal choice for you. Let’s find out more about them.

What are balanced advantage mutual funds?

Balanced advantage funds, also known as dynamic asset allocation funds, offer the best of equity and debt. These mutual funds are hybrid funds that invest in equity and debt as per the prevailing market conditions. Equity helps to grow your wealth over the long term, and the debt securities lower the overall risk. As a combination, these mutual funds allow you to create wealth at reduced risk than pure equity.

What are the advantages of investing in balanced advantage mutual funds?

Here are some benefits that you can enjoy by investing in balanced advantage funds:

  • Diversification: Balanced advantage mutual funds offer optimum diversification in equity and debt. This helps to balance out the risk and maximize the rewards.
  • Longtermgrowth: Similar to equity mutual funds, balanced advantage funds are suitable for long term goals. You can consider a SIP or systematic investment plan in these funds and gradually build wealth for all your long term goals.
  • Dual advantage: Balanced advantage funds can offer capital appreciation with equity and capital preservation with debt. This way, you get the best of both worlds with a single investment.
  • Lower risk: Even though your money is invested in equity, the risk involved is comparatively lower. So, while you get to tap on growth opportunities, the risk is still low.
  • Flexible and transparent: Balanced advantage funds can deliver good returns in a flat market and a booming market. So, the chances of making profits are enhanced.

Should you invest in balanced advantage mutual funds?

Investing in balanced advantage funds can be beneficial to several types of investors. Firstly, these funds are great for beginners, as they offer exposure to equity but at a reduced level of volatility. So, if you are just starting out and are skeptical of choosing equity mutual funds, you can consider a SIP in a balanced advantage fund. Secondly, since these funds invest in equity, they can be suited for all long term goals. So, if you are saving for a goal in the future, you can consider adding these mutual funds to your portfolio.

The primary attraction of investing in these funds is the optimal balance of equity and debt that they offer. Your risk gets reduced, and you have more stability. All of this comes with the benefits of high returns from equity and stable dividends from debt.

To sum it up

If you want equity-like returns but at a lower risk, balanced advantage funds may be the right pick for you. These mutual funds can offer the right blend of risk and reward that can help you achieve your goals without too much financial anxiety or stress.

You can download the Tata Capital Moneyfy app to invest in a balanced advantage fund of your choice.