SBI Mutual Fund to launch new fund offer of SBI Balanced Advantage Fund

At a time when the stock markets are quoting at elevated valuations, investors are worried about investing in stocks. To address investors’ worries the fund houses are recommending investments in dynamic asset allocation schemes, also known as balanced advantage funds. SBI Mutual Fund joins the band wagon by announcing the launch of new fund offer (NFO) of SBI Balanced Advantage Fund. The scheme will be an dynamic asset allocation fund that seeks to generate long term capital appreciation by aiming to capture the potential upside and limit the downside in volatile equity markets. SBI Balanced Advantage Fund would track CRISIL Hybrid 50+50 – Moderate Index TRI. NFO will close on August 25, 2021.

The fund managers for SBI Balanced Advantage Fund are Dinesh Balachandran & Gaurav Mehta for equity portion, Dinesh Ahuja for debt portion & Mohit Jain for managing overseas investments.

Depending upon the relative attractiveness of debt and equity the fund will allocate money to these two asset classes. The scheme will be an equity fund for the purpose of taxation as gross exposure to equities will be kept at at least 65% by investing in arbitrage positions when the net equities fall below 65%. The scheme will decide the allocation based on various macro-economic parameters and sentiment indicators.

Vinay M. Tonse, MD & CEO, SBI Mutual Fund said, “SBI Balanced Advantage Fund would help investors to fulfil their asset allocation needs and would be a suitable investment option for investors, particularly those who are risk-averse but at the same time are looking for long term wealth creation and want to cushion their investments from volatile market situations.’’

D P Singh, Chief Business Officer, SBI Mutual Fund said, “Balanced Advantage Funds are an ideal investment option for those seeking to enhance their gains and limit the downside.’’

The minimum application amount (during the NFO period) required is of Rs. 5,000 and in multiples of Re.1 thereafter.

Balanced advantage funds, on an average has given 9.35% returns over last three years ended August 18, 2021 as per Value Research.