Balanced Advantage Funds: 5 things to know before investing in them
Balanced Advantage Funds or popularly known as BAFs are equity mutual fund schemes with a dynamic asset allocation strategy. Depending on the equity valuations, such funds can increase exposure to 80% in stocks while the minimum threshold to stock exposure is 30%. The rest is invested in debt securities. With an inbuilt re-balancing strategy, BAFs sell stocks in their portfolio when valuations are high and do the opposite when markets crack. Such a quick, effective, and conservative investment strategy helps the investor handle the market volatility quite comfortably. Thus, investors get the optimum benefits of both asset classes – debt and equity.
At a time when equity valuations are not cheap with key indices trading at an all-time high, a
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