Canara Robeco MF launches Balanced Advantage Fund: Should you invest?

The fund aims to generate long-term capital appreciation by dynamically investing in equity and equity-related instruments and debt and money market instruments

Canara Robeco Mutual Fund has come up with a new offering called Canara Robeco Balanced Advantage Fund. This new open-ended dynamic asset allocation fund aims to generate long-term capital appreciation and income by dynamically investing in equity, equity-related instruments, debt, and money market instruments.

 

Funds allocation:
 

The portfolio dedicates a significant portion, ranging from 65 per cent to 100 per cent, to equity and equity-related instruments. Meanwhile, the remaining 0 per cent to 35 per cent is allocated to debt and money market instruments. 
 

“Canara Robeco Balanced Advantage Fund is an asset allocation product which will dynamically allocate equity based on an in-house model, to eliminate investor biases. The proprietary model uses Trailing P/B’, ‘Equity Risk Premium’ and ‘Forward P/E’ to set asset allocation formulae in different market conditions,” said Shridatta Bhandwaldar, Head Equities at Canara Robeco Mutual Fund.
 

When selecting equity investments, the fund will be using a top-down approach for sector allocation and bottom-up selection for stocks. It will be a blend of compounders and cyclicals. In its allocation to debt segment, the fund will predominantly invest in government bonds and AAA-rated corporate papers with an aim to maintain stability and liquidity. The debt portfolio will be managed dynamically to capture any mispricing across yield curves. 
 

Investment period:
 

The new fund offer will be open for subscription from July 12, 2024, to July 26, 2024.
 

Fund Manager:
 

The scheme will be managed by Shridatta Bhandwaldar, Ennette Fernandes, Suman Prasad and Amit Kadam.

 

Minimum Investment:
 

The minimum investment amount is Rs 1000. 
 

Investment charges:
 

There is no entry load. An exit load of 1 per cent will be charged if you redeem or switch out more than 12 per cent of your allotted units within 365 days from the date of allotment. No exit load will be charged if you redeem or switch out up to 12 per cent of your allotted units within 365 days or after 365 days from the date of allotment. 
 

Who should invest:
 

Investors seeking a method for dynamically altering their exposure to equity.
 

Investors with a moderate-risk appetite and long-term investment horizon of five years and above.
 

Investors trying to moderate their participation in market rallies while mitigating potential losses.
 

Risk profile:
 

The scheme involves “very high risk”, according to the information document.

 

“This NFO also offers 2 special features – Auto Switch which allow investors to invest in select debt schemes during the NFO period wherein the entire amount is switched to the NFO on the last day of NFO. Also, investors who are looking at staggered investment in NFO can invest through 4 equal investments in staggered manner through Smart STP,” said Gaurav Goyal, National Head Sales and Marketing at Canara Robeco Mutual Fund.

 

Important Note:
 

Mutual fund investments are subject to market risks. Investors are advised to carefully read all scheme-related documents before investing.