Last fortnight, we had commenced a discussion on Balanced Advantage Funds (BAF). Let us now turn the spotlight on a few funds in this category and how they have performed over time frames of 1, 3 and 5 years.
These include ICICI Prudential Balanced Advantage Fund, HSBC Balanced Advantage Fund, DSP Dynamic Asset Allocation Fund, Axis Balanced Advantage Fund and HDFC Balanced Advantage Fund.
ICICI Prudential Balanced Advantage Fund has an AUM of R 60,135 crore. The current Asset allocation mix is nearly 53% in Equity, 18% in Arbitrage and 29% in Debt. Its top equity holdings are in the Banks, Automobiles and IT Software sectors. The performance of this fund over a 1-year, 3-years and 5-years time period is 23.9%, 14.1% and 14.8% respectively.
HSBC Balanced Advantage Fund has an AUM of R1,494 crore. The current Asset allocation mix is nearly 50% in Equity, 19% in Arbitrage, 29% in Debt and 2% in Cash and Cash Equivalents. Its top equity holdings are in the Pharmaceutical & Biotechnology, Banks and IT Software sectors. The performance of this fund over a 1-year, 3-year and 5-year time period is 23.6%, 11.7% and 11.9% respectively.
DSP Dynamic Asset Allocation Fund has an AUM of Rs 3,212 crore. The current Asset allocation mix is nearly 30% in Equity, 36% in Arbitrage and 34% in Debt. Its top equity holdings are in Banks, Finance, and IT Software sectors. The performance of this fund over a 1-year, 3-year and 5-year time period are 21.3%, 10.2% and 11.5% respectively.
Axis Balanced Advantage Fund has an AUM of R 2,466 crore. The current Asset allocation mix is nearly 61% in Equity, 8% in Arbitrage, 25% in Debt and 6% in Cash and Cash Equivalents. Its top equity holdings are in the Finance, IT Software and Petroleum Products Sectors. The performance of this fund over a 1-year, 3-year and 5-year time period is 31.9%, 14.5% and 14.6% respectively.
HDFC Balanced Advantage Fund has an AUM of R 94,048 crore. The current Asset allocation mix is nearly 50% in Equity, 15% in Arbitrage, 30% in Debt and 5% in Cash and Cash Equivalents. Its top equity holdings are in the Banks, IT Software and Construction sectors. The performance of this fund over a 1-year, 3-year and 5-year time period is 37.9%, 25.2% and 22.1% respectively.
As is its intent, BAF provides a valuable middle ground for those seeking calibrated exposure to equities with a protective layer of debt. To select the right BAF that matches an investors specific requirement though, is best left to an expert. A one size fits all assumption that leads to random selection of a BAF is thus not advisable.
Ashok Kumar
Head of LKW-India.
He can be reached at ceolotus@hotmail.com
(Views expressed here are personal)