Factors to Consider for Investing in Balance Advantage Funds

Factors to Consider for Investing in Balance Advantage Funds

What is a Balanced Advantage Fund?

A Balance Advantage Fund, also known as BAF’s, is classified as a Hybrid Mutual Fund. Balance Advantage Fund is a mix of equity and debt instruments. The best part of the Balanced Advantage Fund is that they manage their equity and debt instruments. It means that they can dynamically move between equity and debt investments based on investment criteria in response to market conditions.

When market conditions are high, they can invest more money in equities and take advantage of the growth opportunities. Whereas, when the market conditions are low, these funds naturally reduce their equity investments and invest a higher proportion in the safety of debt instruments. Balance Advantage Fund reduces the downside when the market condition fails and helps investors make the most of a full market cycle.

Who Should Invest in Balance Advantage Funds?

Balance Advantage Fund can be ideal for all types of investors who have long term goals.

  • If you are a beginner investor, this fund can give you a balanced exposure to equity investments by managing risk.
  • Because Balance Advantage Fund is dynamic, it can help you to take advantage of positive movements in the equity market
  • You can either invest in a lump sum amount or start a SIP.
  • Balance Advantage Fund can also help you achieve your long term financial goals.

A Balance Advantage Fund also offers you a great opportunity to invest in an equity fund without having to worry about the risk associated with it.

Features of Balance Advantage Fund

Markets are unstable, and the Balance Advantage Fund uses this as their growth strategy. In the long term, investors should take risks to earn from stocks while aiming at fixed income. The features include:

Dynamic Allocation

Hybrid funds have to follow a static asset allocation rule, and hence they have a limitation on adding equity or debt components to the portfolio. Balance Advantage Fund can dynamically change the asset investment as per the requirements. It helps in high returns of the market and the security of debt instruments.


The Balance Advantage Fund can be taxed as equity or debt funds based on the asset allocation. However, most funds maintain the equity exposure to equity derivatives for leveraging the equity tax treatment. They also use the circle technique to lower the risk when stocks are overvalued to maintain the equity allocation.

Diverse Portfolio

Balance Advantage Fund has a diversified portfolio like any other mutual fund. Balance Advantage Fund ensures the stability of large companies and benefits from the growth potential of medium-sized companies.  It also saves from the risk of the equity markets. Moreover, it also depends on the strategy route taken by the AMCs.

How to Select the Best Balanced Advantage Funds?

Each Balance Advantage Fund differs in terms of asset allocation strategy. At the same time, some prefer to follow a conservative approach while others prefer a more aggressive approach. It can result in the performance and the risk profile of the scheme. The success of Balance Advantage Funds also depends on its ability to timely shuffle allocation between equity and debt.

Axis Mutual Fund provides six different Balance Advantage funds i.e Axis Triple Advantage Fund, Axis Arbitrage Fund, Axis Equity Hybrid Fund and many more. You can choose the best plan for yourself with the help of Axis financial planner and achieve your financial goals. You can also calculate the future value of the money invested by using Axis Mutual Fund SIP Calculator App.

Investing early might help you take advantage of compounding and invest in the correct asset class for your risk tolerance and financial goals.

Here are the Parameters to Consider while Selecting the Right Balance Advantage Funds

  • Analyse the fund’s consistency in performance across various market periods compared to the benchmark and category peers.
  • Check whether the equity portion is well-diversified at the stock and sector level.
  • The fund’s debt portfolio should also be invested in high-quality liquid assets like government securities.
  • The mutual fund house should also have a significant performance record and follow a robust investment process with adequate risk management.

A Balance Advantage Funds offers a great opportunity to invest in equities without having to worry about the risk associated with equity investing.

What is a SIP Calculator App?

The SIP Calculator App can help you find the future value of your invested money by taking your SIP into account for a specific period. The SIP Calculator App helps you ascertain the future value of the investment you made. With the SIP Calculator App, you can plan your investment to meet your investment goals.

How to Use a SIP Calculator App?

SIP Calculator App is used to plan your investment in debt/equity/hybrid funds for a short and long term period.

Why Should You Use a SIP Calculator App?

This calculator helps to calculate the wealth gain and expected returns for your monthly SIP investment.