Switching between equity and debt: These ULIP BAF funds return up to 12.2% over 10 years

Balanced Advantage funds or those that switch between equity and debt, are popular even in the insurance industry. Offered as part of the Unit Linked Insurance Policy (ULIP) basket, these funds swing from zilch to 100 percent in equity or debt based on market conditions. For instance, when the equity market is bullish, these funds can increase their equity exposure to capture the upside potential. When the equity market is on a downswing, BAFs can reduce their equity exposure to protect the portfolio. Fund managers follow various matrices to decide their asset allocation, like price-to-earnings ratio, price-to-book value ratio, dividend yield, etc. to measure the relative attractiveness of equity and debt at any point in time. 

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