Business & Investment

Mutual Funds: How Balanced Advantage Fund SIPs Create and Protect Investor Wealth-Experts Explain

The market is a source of trouble when the times are uncertain. The market is also a place where worries go away when the times are right. So when an investor devises an investment strategy, he / she wonders if it will work. And when that works, I’m worried about whether they can protect, save, or invest wisely the money they earn from her investment strategy. Then there are concerns about the fix again. When the market recovers, as in the last 18 months, investors begin to think about revisions. But withdrawing from the market is not the solution. In other words, if stocks continue to rise, you will lose future returns. Niranjan Avasthi, Head of Products, Marketing and Digital Business at Edelweiss Asset Management Limited (EAML), said: , A great investment solution. In this article, Niranjan Avasthi shares his knowledge and explains how the Balanced Advantage Fund’s SIP creates and protects wealthy investors.

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Niranjan Avasthi explained the basic background of SIP at BAF: “Regular investment in equity mutual funds through SIP has helped many investors. It will be convenient to continue investing. Not only does it reduce timing risk. Investors choose SIP in BAF to effectively invest in equity and bond combinations. Equity allocations are determined by a multi-factor model. A model that needs to allocate more stocks when stocks are increasing is working. This model goes to stocks even if the stocks are at a disadvantage or are on a downtrend. Quickly reduce your exposure. Dynamic allocation protects the downside and at the same time is positive in the stock market. “

BAF strategy

“The Balanced Advantage Fund (BAF) is working on this strategy. Investing in this scheme through a systematic investment plan (SIP) has rewarded investors in the past. This may not excite a lot of people as it may seem like a low return. The downside numbers give you the point of the strategy. It cuts volatility by almost half. , Get a high score with the maximum drawdown parameter. Maximum drawdown is the maximum loss the scheme incurs from the previous top or peak, despite some volatility in the market. “

Benefits of BAF

“There are two clear advantages to Balance Advantage Funds (BAFs), one is the advantage of equity focus. Most balance advantage schemes are of high quality in rising markets,” said Avasti. Increase allocation to companies. Offer better returns than broader markets. The second advantage is exposure to high quality fixed income with little risk and avoiding unpleasant surprises. These factors Will further reduce volatility and improve BAF returns. If BAF maintains at least 65% exposure to equity, it will be taxed as an equity fund. “

BAF: Low volatility.Better return

“This strategy makes investors relatively less volatile, so even risk-averse investors looking to invest in equities can start SIP with this scheme. If you want to invest in one at any time, BAF will pass or pass the Systematic Transfer Plan (STP) in a short period of time. SIP guarantees a disciplined approach to investing. The longer you invest, the more you invest. Risk-adjusted returns on Shows a record high of 10,351.3 chlores. This is the first time the total SIP has exceeded 10,000 chlores. In September 2021, nearly 268,000 rupees of SIP accounts were added. This is another record addition in the industry, which shows a growing interest in SIP when it comes to investing in equities. “
Advice for long-term MFSIP investors

“In light of these facts, long-term retail investors can consider doing SIP under the BAF scheme. In addition to reasonably good and stable returns, SIP at BAF can also be considered a long-term investment. The BAF scheme could be part of that, one of the core investment portfolios for long-term goals such as higher education for children and post-retirement planning, “concludes Avasti.

(Disclaimer: The views / suggestions / advice presented here in this article are by investment experts only. ZeeBusiness advises readers to consult an investment adviser before making financial decisions. It is recommended.)

Mutual Funds: How Balanced Advantage Fund SIPs Create and Protect Investor Wealth-Experts Explain Mutual Funds: How Balanced Advantage Fund SIPs Create and Protect Investor Wealth-Experts Explain

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