Most people either invest in high-risk and high-gain portfolios for a large profit or go for small ones to prevent risks as much as possible. The right way to invest, however, is in between and hybrid funds give you the chance to do so. 

A balanced advantage fund is a kind of hybrid fund that is a part of a mutual fund scheme that invests in a group of assets like Debt and Equity. Such investments are also called dynamic asset allocation funds, and their portfolios are rebranded based on market conditions on a periodic basis. Once you understand the balanced advantage fund meaning, you will find it easier to analyze the investment scheme. 

If you are wondering why you should include a balanced advantage fund in your portfolio, we are here to enumerate the reasons for you. We have explored the pros attached to this kind of investment and hope it helps you make a sound investment decision. 

Why You Should Opt for Balanced Advantage Funds 

• Stable Returns 

Stable returns go a long way. Most people, who invest in mutual funds, look for some investments that would reap them stable returns over a period of time. Balanced Advantage funds invest dynamically in both equity and debt which provides the investor with a debt cushion that helps them deal with the volatilities of the equity part of their investment. It works as a balance during a crisis in the market and does not drain all your money. Equity funds do not generate returns as stable as debt funds, and thus they make a great pair for medium and long-term investments. 

• Minimal Monitoring 

A diversified investment portfolio gives you the best returns as each balances the other and acts as a stabilizer in terms of market volatility. Stocks, equity, bonds, etc., together make a diverse portfolio but meticulously monitoring the market can be challenging and time-consuming. A balanced advantage fund gives you the perfect solution. One umbrella mutual fund investment will solve all your problems without you having to constantly track the market and act accordingly. 

• Tax Benefits 

A balanced advantage fund is categorized as an equity-oriented fund and therefore taxed at 15% for 12 months and, over that, 10%. So if you are planning for a medium or long-term investment, you will be able to save a considerable amount of tax money. 

• Low Risk

The debt securities offer your investment the characteristics of low-risk funds. With equity funds and debts going hand in hand, the overall risk factor of your portfolio is reduced. The risk of capital erosion is also reduced making the investment a great plan for moderate risk takers. However, the lower risk does not mean your returns will be any less. The equity aspect also takes care of your wealth creation. 

• Dynamic Asset Allocation Strategy 

A balanced advantage fund spreadsheet out your assets in such a way that it becomes easy to handle them in times of need. This dynamic asset allocation strategy allows fund managers to move around money according to market trends. For example, when the market dips, more of your investment can go into debt funds to minimize the risks. Similarly, during the ups, your funds can be moved to equity to generate more profits. Therefore, a balanced advantage fund lets you lower your risks and get better returns. 

Balanced Advantage funds work great for all kinds of investors and especially the newbies in the market who are looking for a safe yet dynamic investment portfolio. You do not have to monitor the market constantly and the fund managers will supervise your funds and act according to the trend of the market. It is a brilliant investment plan that gives you good returns without too much risk.