HDFC Balanced Advantage Fund: Why to invest?

Introduction

The HDFC Balanced Advantage Fund is a dynamic asset allocation fund that aims to provide long-term capital appreciation and income generation by investing in a mix of equity and debt instruments. This article provides a detailed analysis of the fund’s performance, key metrics, and reasons for investment.

Fund Details

  • Scheme Launch Date: September 11, 2000
  • Fund Manager (s): Srinivasan Ramamuthy, Nirmal MOrakhia, Dhruv Muchhal, Anil Bamboli, Gopal Agarwal and Arun Agarwal

Performance Metrics

Annualized Returns – Growth/Regular Plan

  • 1 Year: 31.89 %
  • 3 Years: 21.33 %
  • 5 Years: 21.85 %
  • 10 Years: 15.16 %

Note: Returns are as of 11 Oct 2024. Past performance may not be indicative of future results.

Key Ratios

  • Total Expense Ratio (TER): 1.35% as on 31 Aug 2024
  • Standard Deviation: 10.1 vs 7.84 category average
  • Alpha: 8.34 vs 1.16 category average
  • Beta: 1.23 vs 0.99 category average
  • Sharpe Ratio: 1.4 vs 0.72 category average
  • Treynor’s Ratio: 0.11 vs 0.06 category average

Portfolio Composition

Top 10 Holdings (as of [insert latest date])

  1. HDFC Bank
  2. ICICI Bank
  3. NTPC
  4. SBI
  5. Coal India
  6. Infosys
  7. L&T
  8. ITC
  9. Reliance Industries
  10. Axis bank

Why Invest in HDFC Balanced Advantage Fund?

  1. Dynamic Asset Allocation: The fund’s flexible approach allows it to adjust its equity-debt mix based on market conditions, potentially optimizing returns while managing risk.
  2. Experienced Management: Led by experienced fund managers.
  3. Diversification: The fund provides exposure to both equity and debt markets, offering a balanced investment solution.
  4. Risk Management: The ability to shift between asset classes helps in managing volatility and downside risk.
  5. Tax Efficiency: As an equity-oriented hybrid fund, it may offer more tax-efficient returns compared to pure debt funds for long-term investors.
  6. Regular Income Potential: The debt component of the portfolio can provide steady income, making it suitable for investors seeking regular cash flows.
  7. Proven Track Record: With a history dating back to 2000, the fund has demonstrated its ability to navigate various market cycles.
  8. Large Fund Size: As one of the largest funds in its category, it benefits from economies of scale and liquidity.
  9. Brand Reputation: HDFC Mutual Fund is one of India’s leading asset management companies with a strong reputation for fund management.
  10. Suitable for Conservative Equity Investors: The fund’s balanced approach makes it appropriate for investors who want equity exposure with relatively lower volatility.

Legal Disclaimer

Mutual Fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. Past performance is not indicative of future returns. The information provided in this document does not constitute investment advice and should not be relied upon as such. Investors are advised to consult their financial advisors before making any investment decisions.

This product is suitable for investors who are seeking:

  • Capital appreciation and income over long term
  • Investment predominantly in equity and equity related instruments and the rest in debt and money market instruments

Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

The information contained herein is obtained from sources believed to be reliable, but its accuracy, completeness, or correctness is not guaranteed. The opinions expressed herein may change without notice.