Which is better balanced advantage fund or multi asset fund?
If you are a new investor or are risk-averse, go for balanced advantage funds. Multi asset allocation funds can be a convenient option but do assess whether you need to invest in gold or not and if yes, do explore other gold-related investment options.
Lower returns than Equity-oriented funds: While balanced advantage funds might be a safer way to participate in the stock market, the safety comes at a cost. Most balanced funds underperform equity mutual funds, especially during bull markets, because a portion of their investment is still dedicated to debt funds.
Multi-Asset funds do have some potential drawbacks. One of these is fees. Multi-Asset funds typically charge higher fees than single-asset class funds, due to the additional management required to manage the portfolio across multiple asset classes.
Multi-asset funds offer a diversified portfolio across asset classes, professionally managed to reduce volatility and improve risk-adjusted returns. They also provide tax-efficient asset allocation and lower taxation compared to fixed-income and gold ETFs.
A balanced investment strategy combines asset classes in a portfolio in an attempt to balance risk and return. An asset allocation fund is a fund that provides investors with a diversified portfolio of investments across various asset classes.
Disadvantages of Investing in a Balanced Advantage Fund
Higher Expense Ratio: Balanced Advantage Funds have a higher expense ratio compared to pure equity funds. This is because these funds employ a dynamic asset allocation strategy, which requires active management and therefore higher costs.
With yields on fixed-income instruments expected to stay high and equity valuations at a premium to long-term averages, financial planners believe one of the best ways for investors looking to enter the markets now would be through balanced advantage funds.
Multi Asset Funds are relatively less risky and volatile. However, don't be under the impression that they are totally risk- free. They also invest in stocks and stocks are risky and volatile in the short term. That is why we always ask investors to enter in these schemes with a minimum horizon of five years.
Multi-asset funds can offer investors exposure to a broader range of assets, sectors, strategies and direct investment exposures (e.g. individual securities, bonds) with greater flexibility. They are diversified across both traditional and non-traditional asset classes, such as real estate and infrastructure.
Inflation is rising, interest rates are high and there is a lurking fear of recession. In times like these, multi asset funds are considered a safe bet for stable returns. Multi asset mutual funds are those than invest the corpus across multiple asset classes like equity, debt and commodities.
Who should invest in multi-asset funds?
"Multi-asset allocation funds are gaining popularity among new investors who are looking for a steady growth investment vehicle. These funds provide exposure to different asset classes like equity, debt, and gold, which can help investors diversify their portfolios.
In contrast, a balance advantage fund is a combination of equity and debt-based funds. According to experts, both Flexi cap mutual funds and balance advantage funds are good, and investors should invest in them according to their investment goals.
Funds often come in themes, like collections of shares in sustainable companies, properties in America, or bonds from European governments. Some investors pick and mix about 8–20 funds and make a portfolio.
Balanced funds smooth returns by adding bonds to a portfolio of stocks, and this approach may help reduce the chances that new investors will panic and sell their investments in a downturn, hurting their long-term returns.
Whereas people who are retiring with more typical time horizons, so people retiring with 25- or 30-year time horizons, are better off with portfolios that are balanced in nature. The 60/40, the 50/50, even the 40/60 portfolio tends to support the highest safe withdrawal amount.
A balanced fund automatically spreads your money across a diversified portfolio of stocks and bonds. This method of diversification is a low-cost way to diversify your money and reduces much of the risk of picking the wrong investments.
1. Current NAV: The Current Net Asset Value of the HDFC Balanced Advantage Fund as of Feb 08, 2024 is Rs 451.57 for Growth option of its Regular plan. 2. Returns: Its trailing returns over different time periods are: 39.14% (1yr), 24.82% (3yr), 19.15% (5yr) and 18.55% (since launch).
Taxation of balanced advantage funds (equity-oriented)
Gains earned from equity funds with a holding period of more than a year are considered long-term capital gains and taxed at 10% on gains exceeding Rs 1 lakh in a financial year.
Taxation of Balanced Advantage Funds
Short-term capital gains are taxed at 15%, plus cess and surcharge. Long-term capital gains up to Rs 1 lakh are tax-exempt; any gains above Rs. 1 lakh are taxed at 10%, plus cess and surcharge.
- LIC MF Balanced Advantage Fund. ...
- Mahindra Manulife Balanced Advantage Fund. ...
- Mirae Asset Balanced Advantage Fund. ...
- PGIM India Balanced Advantage Fund. ...
- Quant Dynamic Asset Allocation Fund. Unranked. ...
- SBI Balanced Advantage Fund. Unranked. ...
- UTI Balanced Advantage Fund. Unranked. ...
- WhiteOak Capital Balanced Advantage Fund. Unranked.
Which is the best balanced advantage fund for monthly dividend?
- BOI AXA Mid and Small Cap Equity and Debt Fund. (Erstwhile BOI AXA Mid Cap Equity And Debt Fund) ...
- HDFC Balanced Advantage Fund. (Erstwhile HDFC Growth Fund and HDFC Prudence Fund) ...
- ICICI Prudential Multi-Asset Fund. (Erstwhile ICICI Prudential Dynamic Plan)
A multi-asset class, also known as a multiple-asset class or multi-asset fund, is a combination of asset classes (such as cash, equity or bonds) used as an investment. A multi-asset class investment contains more than one asset class, thus creating a group or portfolio of assets.
- You can consider investing heavily in stocks if you're younger than 50 and saving for retirement. ...
- As you reach your 50s, consider allocating 60% of your portfolio to stocks and 40% to bonds. ...
- Once you're retired, you may prefer a more conservative allocation of 50% in stocks and 50% in bonds.
Many financial advisors recommend a 60/40 asset allocation between stocks and fixed income to take advantage of growth while keeping up your defenses.
If it is done before April 1, 2023, gains are taxed at 20 per cent after providing the benefit of indexation if held for more than three years, otherwise they are added to the income and taxed as per the applicable slab.
