How to plan retirement with Balance Advantage Fund investment


A balanced advantage fund dynamically manages the asset allocation throughout debt and equity, depending on the equity market valuation. It is based on the model of ‘purchase low and sell at high cost’ in equity markets to generate long-term wealth. This is a good investment solution for you as an investor. Adopting this model-based outlook assists in rebalancing investments automatically between fixed-income instruments and equity in a tax-efficient way without you as an investor keeping track of the same. Generally, other categories of mutual funds like equity mutual funds tend to periodically change their asset allocation as per the changing economic scenario while balanced funds behave in alignment with their orientation and do not move beyond the prescribed limit in an investment mandate. While making an investment in a balanced advantage fund, you as an investor must look at these – return, risk, cost, financial goal investment, timeframe, and tax on profits. 

Crucial benefits of investing in balanced advantage funds – 

       Asset allocation approach adopted by this fund is counter-cyclical. It increases exposure to equities as the markets fall and vice versa. The assets in these funds are managed dynamically between debt and equity. However, as an investor, you get an opportunity through this fund to buy low and sell the same at high. 

       You can go for the SIP (systematic investment plan) route to invest in a balanced advantage fund to meet your long-term financial goals like marriage, child’s higher education or retirement. 

Such funds are prudent for the current generation of professionals who do not look to follow a traditional career path, or if you are one of those who want to have a dynamic career dependent on distinct skills and want to take relevant risks to meet your business ideals. Also, it may be the best investment for you if you are still young and want to avoid and want to avoid the traditional approach or prefer to be smart by dynamically managing your investments and optimising your returns. 

Why must you opt for a balanced advantage fund to design your retirement plan?

A balanced advantage fund fundamentally is a kind of fund investment that falls within the hybrid mutual fund category. This basically switches exposure between debt and equity investments depending on a specific investment parameter often predetermined by the fund management team and is based on the market conditions. When the equity market begins rising, balanced advantage funds can invest a higher amount in equity and take benefit of growth opportunities. In contrast, when equity market begins to drop, it dynamically can shift a bigger proportion of your investment portfolio to debt investments. In this way, a balanced advantage fund can protect actively the portfolio from rapid movements in the equity market. 

From a retirement viewpoint, this fund can add good value to your investment portfolio in various ways. Discussed here are 2 major ways – 

Considers asset allocation strategy 

It is a known fact that portfolio investment allocation through multiple assets like equity, debt and gold can assist you to diversify your investment risk. However, determining when you must invest and how much you must invest in every asset class may be challenging. A balanced advantage fund automatically takes good care of the asset allocation needs by investing in debt, gold and equity and dynamically shifting the investment exposure. 

Has the potential to generate returns over the long term

Equities are looked upon as an instrument that generates long-term growth. However, owing to their volatility, many may prefer to avoid any direct equity exposure. Balanced advantage funds can endow you with the required equity exposure, which can potentially assist you to generate long-term inflation-beating returns for your post-retirement days. 

A balanced advantage fund mitigates all imperatives of designing a prudent retirement plan. You can either consider investing a lumpsum amount or opt for the SIP mode to begin your investment in a balanced advantage fund. In both scenarios, if you want to accumulate a massive amount of wealth by the time you retire, you must begin investing at the earliest and remain invested for a long time period.


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