Best Balanced Advantage Funds

18 Dec

Mutual fund participants swear by balanced advantage funds or dynamic asset allocation funds. They believe these schemes are ideal for new investors and conservative investors to get into the market without worrying too much about the market levels and valuations. Read on if you want to find out more about these schemes.

Balanced advantage funds invest in a mix of stocks, debt, and arbitrage opportunities. These funds will decide the equity investments depending on the key market or in-house parameters. They will invest less in stocks when the market is very high, or valuations are stretched. They will invest more in equity when stocks are available at attractive prices. In short, they do the job of juggling equity exposure for investors.

Sure, these funds limit equity exposure based on valuations, but does that make them really safe? Are they shockproof? Not really. Don’t be under the false illusion that balanced advantage funds are a safe investment. In fact, many mutual fund distributors make such claims. However, don’t be swayed by such claims. Any mutual fund scheme that invests in stocks can’t be safe. It also cannot avoid volatility. So, invest in balanced advantage funds only if you can tolerate the risk of investing n stocks. Also, invest only if you have an investment horizon of at least five years.

Experts recommend the following schemes for investment.

Edelweiss Balanced Advantage Fund Direct-Growth ★★★★★