Please indicate if you would like to keep the HDFC Balanced Advantage Fund for the past three and a half years. The value of the fund is consistently 7% lower. However, some dividends are paid regularly. To say ??0.230 per unit.
The Balanced Advantage Funds are hybrid funds that invest in both stocks and debt. The allocation between equities and debt is not fixed and continues to change depending on the market outlook and the opinions of the fund’s management team. Advantage Balanced Funds are suitable for conservative investors looking to generate higher returns than debt with limited risk.
However, HDFC Balanced Advantage Fund is more aggressively managed than its peers and does not use derivatives to reduce its exposure to equities below 65% of the corpus. The fund currently has almost 70% equities while its peers had a lower equity allocation. At the current market level, from a return perspective, this fund would have outperformed its peers in the Balanced Advantage category due to its strong allocation to equities, but it also adds more volatility. You cannot compare Hybrid Balanced Advantage funds with Diversified Equity funds because the fund will have a reasonable allocation of debt at all times. The fund has generated returns of almost 18% per year over the past three years, which is fair considering it is a balanced fund and market conditions during the period. If your investment horizon continues to be long even after holding it for three years and at the same time you want to take limited risks, you can continue to hold your investment in HDFC Balanced Advantage Fund. If you want to take additional risks and are willing to spend more time, you can switch to a diversified equity fund where your money will be invested only in stocks.
– Response from Harshad Chetanwala, Founder of MyWealthGrowth.com
(Have questions about personal finance? Email [email protected])
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