Losing traction: BAFs' dream run halts even as equity market stays volatile

Funds see outflows for four months on the trot

Balanced advantage funds (BAF), which emerged as an investor favourite in the latter part of 2021, have hit a rough patch in terms of attracting inflows. In the past four months, investors have pulled out a net Rs 2,680 crore from the hybrid mutual fund (MF) offering.

This comes even as the equity market remains volatile and debt yields are elevated — a scenario suited for investment in BAFs.

Industry executives and MF distributors say outflows could be a result of investor dissatisfaction with certain schemes, bank fixed deposits (FDs) becoming attractive, and a decline in lump sum flows into