Why should you start SIP in Dynamic Asset Allocation Funds now?
Apart from the strong inflow, Dynamic Asset Allocation Funds have also set a portfolio record of 35,27,506, Net Assets Under Management of Rs 1,49,883.93 Cr, and Average Net Assets Under Management of Rs 1,47,500.60 Cr as of September 30, 2021, according to the data of AMFI, which is also a record-holding in the Hybrid Scheme category.
The data clearly demonstrates how equity investors have begun to diversify their portfolios with debt in order to achieve risk-adjusted returns over the long run and against the bull market phase, and investing in Dynamic Asset Allocation Funds can be a decent choice now because the market is rocketing at record highs and these funds change their equity and debt allocation based on market scenarios to generate best possible returns to the investors having low or moderate risk appetite with a personal financial goal of 3 to 5 years.
As Dynamic Asset Allocation Funds is a blend of equity and debt the allocation percentage is changed by the fund manager based on the movement of the stock market, most funds in this category include a diversified equity part that includes companies of all types of market capitalization and debt component of the fund doesn’t assume much credit risk and can generate minimal interest rates resulting in a well-diversified portfolio both in market upside and downside.
This implies that during a market bull run, the fund’s equity investments help you gain from rising equity prices in the long run, while the fund’s debt investments safeguard your portfolio from the market’s downturn or a bear market.
Starting SIP in best performing Dynamic Asset Allocation Funds can be a sure option now in the current market scenario for investors who do not want to take higher risk by investing in pure equity funds such as mid cap, small cap, or large cap, and want to generate inflation-beating and risk-adjusted returns in the long run by not impacting the market movements on their portfolio.
Consequently, based on Value Research’s 5-star rating, low expense ratio, past performance, and other factors, we have chosen three Dynamic Asset Allocation Funds which you can consider to start your SIP in 2021.
Edelweiss Balanced Advantage Fund Direct-Growth
This is an open-ended dynamic asset allocation fund having been launched in the year 2013 by the fund house Edelweiss Mutual Fund. The fund’s expense ratio is 0.44 percent, which is lower than the expense ratio charged by most other funds in the Dynamic Asset Allocation fund category.
Currently, the fund is allocated to equity at 59.90% and debt at 20.90%. According to the fund house’s official website, Edelweiss Balanced Advantage Fund Direct-Growth lump sum returns for the previous year are 36.27 percent, and it has provided 13.85 percent average annual returns since its inception.
The fund has a significant equity exposure in the Financial, Technology, Energy, FMCG, and Automobile sectors. The top five holdings of the fund are ICICI Bank Ltd., Infosys Ltd., Reliance Industries Ltd – PPE, Bharti Airtel Ltd., and Nifty 50. The fund has a 5-star rating from Value Research, which reflects the fund’s past performance in rising and falling markets but should not be your primary consideration while investing.
The fund’s Net Asset Value (NAV) is Rs 39.45 as of October 12, 2021, and its Assets Under Management (AUM) is Rs 5,845 Cr. The fund charges an exit load of 1% if units more than 10% of the investment are redeemed within 1 year of the purchased date. SIP in this fund can be started with as little as Rs 500.
| Scheme |
|
Scheme Benchmark CRISIL Hybrid 50+50 – Moderate Index |
Additional Benchmark NIFTY 50 – TRI |
| Period |
Return (CAGR) |
Return (CAGR) |
Return (CAGR) |
| 1 Year |
36.27% |
28.63% |
52.63% |
| 3 Year |
19.42% |
17.10% |
21.16% |
| 5 Year |
14.88% |
12.75% |
17.02% |
| Since Inception – Existing Plan |
13.85% |
9.50% |
14.56% |
SIP Returns
| Scheme |
|
Scheme Benchmark CRISIL Hybrid 50+50 – Moderate Index |
Additional Benchmark NIFTY 50 – TRI |
| Period |
Return (XIRR) |
Return (XIRR) |
Return (XIRR) |
| 1 Year |
33.66% |
19.99% |
56.50% |
| 3 Year |
25.17% |
12.71% |
31.21% |
| 5 Year |
18.53% |
10.18% |
21.71% |
| Since Inception – Existing Plan |
14.97% |
9.86% |
16.91% |
| Source: edelweissmf.com. Data as of 12 Oct 2021 |
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Kotak Balanced Advantage Fund Direct – Growth
Kotak Balanced Advantage Fund Direct-Growth is a mutual fund scheme launched by Kotak Mahindra Mutual Fund in 2018. The fund’s expense ratio is 0.46 percent, which is lower than the expense ratio of most other funds in the same category. The fund now has a 34.0 percent allocation to equity, a 39.10 percent allocation to cash instruments, and a 26.90 percent exposure to debt.
According to the fund house’s website, Kotak Balanced Advantage Fund Direct-Growth returns for the previous year are 23.60 percent, and it has provided 13.66 percent average annual returns since its inception. The equity allocation of the fund is split among the financial, metals, technology, services, and energy sectors. Kotak Liquid Plan A – Growth, GOI, ICICI Bank Ltd., Adani Ports and Special Economic Zone Ltd., Infosys Ltd. are the fund’s best-performing holdings.
Value Research has given the fund a 5-star rating, indicating a high grade of performance. As of October 12, 2021, the fund’s Net Asset Value (NAV) is Rs 15.06 and its Assets Under Management (AUM) is Rs 11,035.94 Cr. If units more than 8% of the investment are redeemed within 1 year of the purchased date, investors will have to pay an exit load of 1%. An initial investment in this fund can be made with Rs 1000.
| In SEBI Format |
CAGR Since Inception |
5 Year |
3 Year |
1 Year |
| Kotak Balanced Advantage Fund – Direct (G) |
13.66 |
0 |
15.59 |
23.6 |
| Nifty 50 Hybrid Composite Debt 50:50 Index |
13.98 |
12.82 |
16.47 |
26.88 |
| Nifty 50 TRI |
16.83 |
17.05 |
21.18 |
52.63 |
| Data as of Oct 12, 2021, Source: kotakmf.com |
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Union Balanced Advantage Fund Direct – Growth
Union Balanced Advantage Fund Direct-Growth is a Dynamic Asset Allocation mutual fund scheme that was introduced in 2017 and has performed well over the previous three years. The fund’s expense ratio is 0.89 percent, which is a bit higher than most other funds in the same category.
The fund now has a 30.10 percent allocation to equity, a 51.0 percent exposure to cash derivatives, and an 18.90 percent exposure to debt. Union Balanced Advantage Fund Direct-Growth returns over the last year are 21.42 percent, and it has generated 12.32 percent average annual returns since its inception, according to the fund house’s website.
The fund’s primary equity exposure is split across the financial, technology, energy, metals, and healthcare sectors. The top five holdings of the fund are GOI, HDFC Bank Ltd., ICICI Bank Ltd., Reliance Industries Ltd., and Infosys Ltd. The fund has also received a 5-star rating from Value Research, indicating the fund’s historical success in terms of generating returns in strong market fluctuations.
The fund’s Net Asset Value (NAV) is Rs 15.53 as of October 12, 2021, and its Assets Under Management (AUM) is Rs 1,448.39 Cr. If units are redeemed within 15 days of the investment date, the fund imposes a 15 exit load, and one may begin SIP in this product with a monthly contribution of Rs 1000.
3 Best Dynamic Asset Allocation Funds In 2021
Based on a 5-star rating from Value Research, low expense ratio, and historical performance versus their benchmarks, these are the three finest Dynamic Asset Allocation Funds in 2021 to consider for a SIP.
| Funds |
1 mth returns |
6 mth returns |
1 Yr returns |
3 Yr returns |
5 Yr returns |
| Edelweiss Balanced Advantage Fund Direct-Growth |
1.86% |
18.04% |
36.27% |
19.42% |
14.88% |
| Kotak Balanced Advantage Fund Direct-Growth |
1.17% |
11.50% |
23.60% |
15.58% |
13.66% (since inception) |
| Union Balanced Advantage Fund Direct-Growth |
1.37% |
9.75% |
21.42% |
15.63% |
12.32% (since inception) |
| Source: Groww |
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