Investing In Hdfc Balanced Advantage Fund: A Comprehensive Guide

HDFC's Balanced Advantage Fund is a mutual fund scheme that seeks to provide long-term capital appreciation and income through a dynamic mix of equity and debt investments. The fund management team can increase or decrease the allocation of equity shares depending on market outlook, making it suitable for conservative investors. With no lock-in period, this fund offers flexibility, and its performance has been rated as better than the category average. Investors can purchase this fund directly from the HDFC Mutual Fund website or through platforms like MF Central and MF Utility.

How to buy HDFC Mutual Funds

There are several ways to buy HDFC Mutual Funds. You can buy them directly from the website of the fund house. For example, HDFC Balanced Advantage Fund can be purchased from the website of HDFC Mutual Fund. You can also buy mutual funds through platforms like MF Central and MF Utility. If you are not comfortable buying mutual funds online, you can seek help from a mutual fund distributor. Most banks also act as mutual fund distributors, so you can connect with your bank for assistance.

ET Money is another platform that allows you to invest in HDFC Mutual Funds. You can do so by clicking on the "Invest Now" button, entering your email address, and selecting whether you want to make a one-time investment or start a Systematic Investment Plan (SIP). You will then need to add the amount you want to invest and provide some additional details, including the bank account from which you will be making the payment.

It is important to note that HDFC Mutual Funds fall under the category of Dynamic Asset Allocation or Balanced Advantage funds. These funds invest in both equity shares and bonds, with the proportions dynamically managed by the fund management team based on their market outlook. While there is no lock-in period for HDFC Mutual Funds, investors should be prepared for ups and downs in their investment value, and they must invest only through the SIP route for all equity-linked investments.

HDFC Balanced Advantage Fund's performance

The HDFC Balanced Advantage Fund is a mutual fund that has been in operation for 29 years and 7 months. It has delivered 18.10% returns since its inception. As of 30-Aug-2023, the Net Asset Value (NAV) of the fund was ₹371.4380. The fund's AUM (Assets Under Management) was ₹60,641 Cr as of 31-Jul-2023.

The HDFC Balanced Advantage Fund is considered to have a conservative investment strategy, with most of its holdings in Large Cap stocks and debt instruments. As of 31-Jul-2023, the fund had invested 60.71% in equity, 25.8% in debt, 11.76% in cash and cash equivalents, and 1.73% in real estate. The fund's portfolio turnover ratio was 178.98%, and it held stocks and bonds in its portfolio for longer than its peers.

The fund's performance has been rated as above average among its peers. It has a very high-risk rating as per SEBI's Riskometer. The expense ratio of the fund is 1.46%.

The fund management team may increase or decrease the allocation to equity shares depending on their market outlook. This dynamic asset allocation makes the fund suitable for conservative equity investors as it tends to fall less than pure equity funds when the stock markets decline.

HDFC Balanced Advantage Fund's asset allocation

The HDFC Balanced Advantage Fund is a dynamic asset allocation or balanced advantage fund. This means that the fund management team may increase or decrease the allocation to equity shares depending on their market outlook. As of 30 September 2024, the fund's asset allocation was as follows:

• 49.76% in equity
• 29.39% in debt
• 20.85% in other

Within the equity allocation, the fund was invested in the following sectors:

• 39.98% in large cap
• 21.69% in financial
• 10.02% in energy
• 4.39% in technology
• 4.15% in healthcare

The fund's debt portion has been described as having low credit quality, indicating that the quality of borrowers is not too great.

HDFC Balanced Advantage Fund's risk and return

The HDFC Balanced Advantage Fund is a mutual fund that seeks to provide long-term capital appreciation and income through a dynamic mix of equity and debt investments. The fund management team adjusts the allocation between equity and debt based on their market outlook, with the current allocation being around 50% equity, 30% debt, and the remainder in cash and real estate. This dynamic allocation strategy aims to provide returns that exceed the inflation rate and fixed-income options over the long term.

Risk

The HDFC Balanced Advantage Fund has a "Very High" risk rating according to SEBI's Riskometer. This rating indicates that there is a significant possibility of negative returns on your investment. The fund has a higher standard deviation, suggesting that its returns have been more volatile compared to other funds. Additionally, it has a higher beta, indicating that its performance is more sensitive to market changes. The fund's performance has been more volatile than its peers, as indicated by the higher value of the Nifty 50 Hybrid Composite Debt 50:50 Index.

Return

The HDFC Balanced Advantage Fund has delivered strong returns, outperforming its peers and the benchmark. The fund has provided an average annual return of 16.04% to 18.10% since its inception 29 to 30 years ago, with recent one-year returns of 33.28%. It has consistently ranked highly for its returns and has doubled the invested money approximately every four years. The fund's ability to deliver consistent returns is higher than most funds in its category, and it has also demonstrated a higher capacity to control losses during market downturns.

While the HDFC Balanced Advantage Fund carries a high risk of potential negative returns, its dynamic asset allocation strategy has historically provided strong returns that beat inflation and fixed-income options. The fund's ability to consistently generate high returns and manage losses during market downturns makes it a good option for investors seeking long-term capital appreciation.

HDFC Balanced Advantage Fund's investment objective

The HDFC Balanced Advantage Fund seeks to provide long-term capital appreciation and income from a dynamic mix of equity and debt investments. The fund management team can increase or decrease the allocation to equity shares depending on their market outlook.

The HDFC Balanced Advantage Fund is suitable for conservative investors as it tends to fall less than pure equity funds when the stock market declines due to its debt allocation. This fund has no lock-in period, and the minimum SIP amount is ₹100. The expense ratio is 1.46% for the regular plan and 0.72% for the direct plan.

The fund's portfolio is largely conservative, with most holdings in Large Cap stocks and debt instruments. As of 31-Jul-2023, the fund had invested 60.71% in equity, 25.8% in debt, 11.76% in cash and cash equivalents, and 1.73% in real estate.

The HDFC Balanced Advantage Fund has delivered average annual returns of 16.04% since its inception 11 years ago and has doubled investors' money every four years. The fund has an AUM of ₹96,536 Crore as of 30-Sep-2024, making it the second-largest fund in its category.

Frequently asked questions