For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

5 Star Rated Dynamic Asset Allocation Funds To Bet In 2022

|

In a turbulent market, the ideal strategy is to hedge equity returns with a debt portfolio, effectively diversifying the risk-reward ratio. While investing only in equity funds is always riskier, combining equity with debt reduces the risk of concentration and provides you with the best opportunity to develop and protect your wealth. Markets have been highly volatile as a result of the pandemic and instability. For novice or experienced investors, investing in dynamic asset allocation funds may be advantageous since asset allocation always helps create long-term wealth amid volatility.

 

Why invest in dynamic asset allocation funds
 

Why invest in dynamic asset allocation funds

For the month of January 2022, Dynamic Asset Allocation/Balanced Advantage Funds under the Hybrid category recorded the second-highest positive inflow of Rs 2,762.95 Cr. Dynamic Asset Allocation funds recorded Rs 1,73,958.68 Cr as Net Assets Under Management and Rs 1,74,985.91 Cr as Average Net Assets Under Management for the month of January 2022. These data as per the Association of Mutual Funds in India (AMFI) clearly states that the appetite for underlying assets tends to surge during periods of market instability.

Based on the market movement, fund managers of this fund dynamically increase or decrease allocation to equity. Simply put, when markets are fair, the fund manager increases equity exposure and decreases debt exposure. When markets are overpriced, the fund manager reduces equity exposure and increases debt exposure.

As a consequence, the fund can provide you with long-term growth potential while also lowering your risk due to debt exposure. The fund's equity investments help you take advantage of long-term growth potential, while the fund's debt investments safeguard your portfolio from declining equity prices.

Following extreme market crashes resulting in higher equity readings, this method considerably protects you from the negative fall by giving you risk-adjusted returns. This fund allows you to diversify your portfolio for better inflation-beating returns by not putting all of your eggs in one basket.

Dynamic Asset Allocation funds are not too volatile because they invest in multiple asset classes such as equity, debt, equity derivatives, real estate, and so on, which reduces the influence of market turmoil. Here are two dynamic asset allocation funds rated 5-star by Value Research based on your lower risk appetite and mid to long-term goals.

Baroda Dynamic Equity Fund Direct-Growth

Baroda Dynamic Equity Fund Direct-Growth

Value Research has given this Dynamic Asset Allocation mutual fund scheme a 5-star rating, and it was launched on November 14, 2018. According to Groww, the recent 1-year returns of Baroda Dynamic Equity Fund Direct-Growth are 12.25 percent, and it has provided 17.46 percent average annual returns since its inception.

The equity segment of the fund is predominantly invested in the Financial, Technology, Energy, Healthcare, and FMCG sectors. The top five holdings of the fund are GOI, Infosys Ltd., Reliance Industries Ltd., ICICI Bank Ltd., and Sun Pharmaceutical Inds. Ltd. The fund now has a 43.3 percent allocation to equities and a 28.20 percent exposure to debt.

The fund has an expense ratio of 0.77 percent, and Baroda Dynamic Equity Fund Direct-Growth has Rs 1,903.43 Crores in assets under management (AUM) as of February 12th, 2022, and the fund's NAV is Rs 16.86 as of February 11th, 2022.

According to ET, the fund's trailing returns in 1 year is 19.8 percent,18.39 percent in 3 years, and 18.58 percent in 5 years and category returns of the fund are 18.18% in 1 year, 11.17% in 3 years, 9.52% in 5 years. SIP in this fund can be started from Rs 500 per month.

Edelweiss Balanced Advantage Fund Direct-Growth

Edelweiss Balanced Advantage Fund Direct-Growth

This Dynamic Asset Allocation mutual fund scheme received a 5-star rating from Value Research and was founded on January 1, 2013. Edelweiss Balanced Advantage Fund Direct-Growth returns over the last year are 13.56 percent, and since its inception, it has generated an average yearly return of 13.20 percent as per Groww.

The fund's equity allocation is primarily engaged in the Financial, Technology, Energy, FMCG, Automobile sectors. HDFC Bank Ltd., ICICI Bank Ltd., Reliance Industries Ltd., GOI, Infosys Ltd. are the fund's top 5 holdings. The fund now has a 59.9 percent allocation to equity and a 20.9 percent allocation to debt, and it has an expense ratio of 0.45 percent, which is lower than most other funds in the same category.

The Edelweiss Balanced Advantage Fund - Direct Plan's current Net Asset Value is Rs 39.1 as of February 11th, 2022, and the fund currently has Assets under Management at Rs 7,353 Crores as of February 12th, 2022.

According to ET, the fund's trailing returns in one year are 24.93 percent, 17.62 percent in three years, 15.52 percent in five years, and 13.32 percent since inception. The minimum SIP amount is capped at Rs 500 in this fund.

Disclaimer

Disclaimer

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advice to buy or sell stocks, gold, currency, or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on GoodReturns.in We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that neither Greynium nor the author of the articles, would be responsible for any decision taken based on these articles. Please do consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates, and authors do not accept culpability for losses and/or damages arising based on information in GoodReturns.in

Read more about: mutual funds mf
Story first published: Saturday, February 12, 2022, 12:57 [IST]
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X