The Indian stock market is now soaring at peak levels, causing considerable worry among equity investors. Because the equity market is at an all-time high, debt mutual funds might be a solid bet for risk-adjusted gains. However, equity investors can start investing or diversify their portfolios across dynamic asset allocation funds to generate a considerable level of returns. Dynamic asset allocation funds, also known as balanced advantage funds, have grown in popularity among equity investors in recent months.
These are funds that allocate their assets between equities and fixed income, guaranteeing investors receive superior risk-adjusted returns. These funds, which adjust the blend of asset classes to fit market circumstances, may be placed in your portfolio to achieve optimal returns with low risk. By keeping this consideration in mind, we have picked here 4 best performing dynamic asset allocation funds in 2021, based on their past returns and ratings by Value Research.
Edelweiss Balanced Advantage Fund Direct-Growth
This dynamic asset allocation fund was launched in 2o13 by the fund house Edelweiss Mutual Fund. This fund has done pretty well in the last 1 year. The 1-year returns for Edelweiss Balanced Advantage Fund Direct-Growth are 33.60 percent. It has returned an average of 13.14 percent per year since its inception, according to the data of Value Research.
The fund's 1-to-5-year returns are higher than the average in the category. The financial, technology, metals, energy, and healthcare sectors make up the majority of the fund's equity holdings. ICICI Bank Ltd., Reserve Bank of India, Reliance Industries Ltd., Tata Steel Ltd., and HDFC Bank Ltd. are the fund's top five holdings. The fund has a low expense ratio of 0.5%. The present AUM of the fund is Rs 3,881 Cr and the most recent NAV as of July 9, 2021 is Rs 36.18. One can start SIP in this fund with Rs 500 and the fund charges an exit load of 1% if units are redeemed within 1 year of investment.
ICICI Prudential Balanced Advantage Fund
The fund house ICICI Prudential Mutual Fund introduced this dynamic asset allocation fund in 2013. The 1-year returns on ICICI Prudential Balanced Advantage Direct-Growth are 27.81 percent. According to Value Research, this fund has generated an average yearly return of 13.28 percent since its inception. This fund has a higher expense ratio of 1.09% and the 1 to 5-year returns are higher than the category average returns.
The fund has its equity sector allocation across financial, energy, automobile, technology, and fast-moving consumer goods sectors. Reserve Bank of India, Reliance Industries Ltd., ICICI Bank Ltd., Infosys Ltd., and Axis Bank Ltd. are the fund's top five holdings. The current asset under management (AUM) of the fund is Rs 32,188 Cr and the current NAV is Rs 50.33 as of July 9, 2021. The fund charges an exit load of 1% if units 10% of the investment redeemed within 1 year. One can start SIP in this fund with a minimum monthly contribution of Rs 100.
DSP Dynamic Asset Allocation Fund
In the year 2014, this fund was launched by the fund house DSP Mutual Fund. DSP Dynamic Asset Allocation Fund Direct-Growth returns are 20.35 percent over the last year. According to Value Research, it has produced an average yearly return of 10.58 percent since its inception. The financial, energy, technology, services, and metals sectors make up the majority of the fund's equity holdings. Infosys Ltd., Indian Oil Corpn. Ltd., Reserve Bank of India, Adani Ports and Special Economic Zone Ltd., and Bharti Airtel Ltd. are the fund's top five holdings.
The fund has an expense ratio of 0.68% and an exit load of 1% would be charged if units in excess of 10% of the investment redeemed within 1 year. The current AUM of the fund is Rs 3,562 Cr and the latest NAV as of July 9, 2021 is Rs 21.10.
Aditya Birla Sun Life Balanced Advantage Fund
This dynamic asset allocation fund was launched by the fund house Aditya Birla Sun Life Mutual Fund in the year 2013. Aditya Birla Sun Life Balanced Advantage Fund Direct-Growth returns were 30.96 percent in the previous year. According to Value Research, it has provided an average yearly return of 12.63 percent since its inception. The fund has a 0.74 percent expense ratio and no exit load.
The fund has its equity sector allocation across financial, technology, energy, construction, and healthcare. Birla Sun Life Cash Plus - Direct Plan, HDFC Bank Ltd., Infosys Ltd., ICICI Bank Ltd., and Tata Steel Ltd. are the top five holdings of the fund. The current AUM of the fund is Rs 3,969 Cr and the recent NAV as of July 9, 2021 is Rs 75.80. One can start SIP with an amount of Rs 100 in this fund.
Best Performing Balanced Advantage Funds In 2021
Here are the 4 best performing balanced advantage funds or dynamic asset allocation funds based on ratings and past returns.
|Fund||1-year returns||3-year returns||5-year returns||Rating by Value Research|
|Edelweiss Balanced Advantage Fund Direct Growth||33.60%||15.02%||13.86%||5 star|
|ICICI Prudential Balanced Advantage Fund||27.81%||12.07%||11.90%||4 star|
|DSP Dynamic Asset Allocation Fund||20.35%||12.31%||10.79%||4 star|
|Aditya Birla Sun Life Balanced Advantage Fund||30.96%||13.05%||12.36%||4 star|
Should you invest?
Amid the current market scenario in which investing only in equity may increase your risk, investing in debt mutual funds is strongly considered. In the current period where the domestic market is all-time high, gilt funds, floater debt mutual funds, low duration, dynamic asset allocation funds are getting huge attraction among the debt mutual fund category by the investors to get risk-adjusted returns. The reason why we have picked dynamic asset allocation funds to invest in is, the last 3 to 5 years SIP returns of this fund are pretty decent. According to the data of Value Research, dynamic asset allocation funds have generated an average SIP returns of 14.52% in the last 3 years and 9.89% in the last 5 years which is much higher than the other debt fund category such as banking and PSU funds.
In the current scenario where interest rates on fixed deposits are around 5.5% which is near to the inflation rate, investing in dynamic asset allocation funds may give you inflation-beating returns in the mid-term. Investing in balanced advantage funds or dynamic asset allocation funds can be a solid option in the present equity market since these funds adjust asset allocation based on the market conditions so that your investment continues to provide consistent returns.
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