Balanced advantage funds fail to deliver

Unlike most categories laid out by the capital markets regulator, the Securities and Exchange Board of India, balanced advantage or dynamic asset allocation is a go-anywhere mutual fund category. In theory, these schemes can move completely into debt when markets get overvalued and vice-versa, with no restrictions. The scheme information documents of some funds impose limits but these are extremely liberal. The idea is that lack of constraints will allow the fund manager to take asset allocation calls and give good returns regardless of market movements. But has this been the case? Unfortunately not.

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