What are balanced advantage funds?
Jun 28, 12:06

Balanced advantage funds are mutual fund schemes that invest in both equity and debt securities. Unlike regular hybrid funds, which keep allocation between equity and debt within certain prescribed limits, BAFs have no such limits and move their allocations more dynamically. Through their own internal valuation processes, fund houses take a call on whether equity markets are over-valued and hence debt investments should be increased and vice-versa. In some fund houses, BAF can even be 90% in equity while even an aggressive hybrid fund has a 65%-80% limit on equity. It is better to check portfolios of such funds to make sure there are not many high-risk debt or equity investments.

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