Why balanced advantage funds are back in the reckoning with investors

People moving from fixed-income should use them as a stepping stone into the equity markets

Balanced advantage funds (BAF), also known as dynamic asset allocation funds, which hold a total asset under management (AUM) of Rs 200,129.84 crore (as of May 31, 2023), have experienced consistent outflows from October to May for an aggregate amount of Rs 3,893.7 crore. However, for many types of investors, this could be a suitable category with the potential to offer a smooth investment experience.

One reason for the outflows from this category was misplaced investor expectations. “Occasionally, the returns from this category mirror that of equity funds, leading many investors to anticipate returns of 12 per cent or