Get Higher returns than FD investment with lower risk in equity markets

invest_growIs your portfolio generating targeted returns? Have you diversified your portfolio well to give you optimum ROI? Do you worry about your investments strategy? Then worry no more. Let me introduce you to well balanced investment strategy for your portfolio which will not only give you higher returns but will also manage your risk. This strategy is used in Dynamic Asset Allocation Funds.

What do you mean by Dynamic Asset Allocation?

Equity markets yield high return but are also more volatile compared to debt markets which give you comparatively low return at low risk. ‘Dynamic Asset allocation’ means creating a balance between various asset class which will give you higher return at moderate risk. Dynamic asset allocation funds are designed to juggle between equity market and debt market which will provide long term capital appreciation. They are very opportunistic. One such example of dynamic asset allocation fund is ICICI Prudential Balanced Advantage Fund.


ICICI Prudential Balanced Advantage Fund is an open ended equity oriented scheme which maintains a net equity allocation of 65% and the balance in debt securities.  This fund aims for growth by investing in equity markets while balancing the risk by investing in debt instruments. ICICI Prudential Balanced Advantage Fund uses an in-house asset allocation model that aims to buy low and sell high. The fund has flexibility to switch between equity and debt markets. Here is comparison of returns of fund against benchmark.

Returns of ICICI Prudential Balanced Advantage Fund – Growth Option as on September 30, 2016 – (IPBAF)

Particulars September 30,2015 to September 30,2016 September 30,2014 to September 30,2015 September 30,2013 to September 30,2014 Since Inception Inception Date
Absolute Returns (%) Absolute Returns (%) Absolute Returns (%) Current Value of Investment of Rs. 10000 CAGR (%)
Scheme 10.85 10.22 35.70 28700 11.41 30-DEC-06
Benchmark 9.68 4.38 28.89 22932 8.88
Nifty 50 Index 8.33 -0.2 38.87 21710.24 8.27
NAV (Rs.) Per Unit (as on September 30,2016 : 28.70) 25.89 23.49 17.31 10 10

Past performance may or may not be sustained in future and the same may not necessarily provide the basis for comparison with other investment. Date of inception:
30-Dec-06 . Performance of dividend option would be Net of Dividend distribution tax, if any. Benchmark is Crisil Balanced Fund-Aggressive Index. For computation of since inception returns (%) the allotment NAV has been taken as Rs. 10.00. Load is not considered for computation of returns. In case, the start/end date of the concerned period is a nonbusiness date (NBD), the NAV of the previous date is considered for computation of returns. The NAV per unit shown in the table is as on the start date of the said period.

Who should invest in Dynamic Asset allocation fund?

Investors who wants higher return compared to fixed deposit but also want to protect their capital against volatility of markets should invest in dynamic asset allocation funds. Basically all earning individuals who wants to grow their savings must invest a certain percentage of portfolio in this fund. It is an ideal investment option for first time investors who wants to invest in equity market with moderate risk.

What are the benefits of investing in Dynamic Asset allocation fund?

One of the key advantages of investing in Dynamic Asset Allocation fund is optimizing your Return on investment with moderate risk. It provides growth along with protection.

The other major benefit of investing in equity oriented mutual fund scheme is tax free returns. Dividend declared on Equity oriented Mutual fund scheme is considered as exempt Income under section 10(35) of Income Tax Act, 1964. Even Long term capital gains that arises on selling this mutual fund units are completely exempted under section 10(38) of Income tax Act, 1964 if mutual fund units are hold for period more than one year.

Mutual Fund investments are subject to market risk, read all scheme related to documents carefully before investing.