Axis Balanced Advantage Fund: A trusted old methodology with crisis-proof capabilities


If you’re an avid investor, chances are you have funds parked in a mutual funds scheme. Easy to invest in, good return expectations, and a less risky bet than pure equity investing, these are just some of the benefits that make mutual funds an attractive investment category.

Depending on one’s needs and risk profile, there are different kinds of mutual fund schemes available for investors. That being said, there are few schemes that balance both equity and debt options as well as a balanced advantage fund.

Balanced advantage funds are a sub-category of hybrid mutual funds, which follow a dynamic asset allocation. These funds invest in a mix of equity and fixed income instruments depending on the in-house models that they run. They enable the investor to diversify a portfolio, weather market volatility, and limit losses when the market is trading in the red.

Given these benefits, it is not surprising to see fund houses like Axis Mutual Fund exploring this category. The fund house’s latest offering, the Axis Balanced Advantage Fund, is a remodeled avatar and repositioning of its Axis Dynamic Equity Fund.

The new scheme aims to give investors a product for capital appreciation and generating income over the long term. The fund decides equity exposure based on an in house proprietary methodology which takes into account market valuations and market trend. The fund intends to allocate majorly towards Large cap names and the current Large cap exposure is around 85% with the balance being towards Mid and Small cap stocks.

In an engaging chat with YourStory, Anupam Tiwari, Equity Fund Manager, Axis Mutual Fund deep-dived into why balanced advantage funds are worth the hype and what investors can expect from the Axis Balanced Advantage Fund.

Here are a few key takeaways from the article:

New fund corrects shortcomings of the old one

Anupam said that when the COVID-19 pandemic struck in 2020 and the markets were extremely volatile, the Axis MF team noticed a few shortcomings in the model of Axis Dynamic Equity Fund. "There was a mismatch between what the model could do and what the new business landscape demanded. Even in its new avatar, the core philosophy and parameters of the fund remain the same. In other words, the inputs remain the same, but the way they function has changed. This way, the fund could yield optimal returns even during abnormal circumstances like lockdowns," he said.

Rookie or seasoned investor, a fund to serve all

If the 'one size fits all' approach has any takers, it would be the Axis Balanced Advantage Fund. The new mutual fund scheme serves the interests of both amateur and experienced investors. Anupam described the fund as a perfect offering for investors who are wary of market volatility, but still wanted to invest in equity.

"It is for both seasoned and rookie investors. All investors want to keep a certain part of their savings in a low volatility option. The Axis Balanced Advantage Fund caters to all investor profiles, be it someone who is young and doesn't have a lot of savings or a seasoned investor who has been investing for the past 15-20 years."

Combining fund manager's expertise with an algorithm approach

Anupam talked extensively about how the fund combines a fund manager’s acumen with a model-driven approach to ensure optimal equity allocation and remove any selection bias. He said, “The fund house does not involve any manual intervention while deciding on how much equity should be invested in.”

The algorithm takes into account three parameters to decide on equity allocation — trailing price to earnings ratio, market volatility and a stock trend indicator to show whether the market is positively biased or not.

"We run the data collected over the last 15-20 years through a regression model and optimize equity allocation and risk. We then use the indicative equity allocation to establish the quantity of equity that will be invested at each level of the three parameters. As there is no manual intervention and hence it's completely unbiased," explained Anupam.

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

For detailed asset allocation & investment strategy, kindly refer to scheme information document.

About Axis AMC: Axis AMC is one of India`s fastest growing assets managers offering a comprehensive bouquet of asset management products across mutual funds, portfolio management services and alternative investments.

Disclaimer: This press release represents the views of Axis Asset Management Co. Ltd. and must not be taken as the basis for an investment decision. Neither Axis Mutual Fund, Axis Mutual Fund Trustee Limited nor Axis Asset Management Company Limited, its Directors or associates shall be liable for any damages including lost revenue or lost profits that may arise from the use of the information contained herein. Investors are requested to consult their financial, tax and other advisors before taking any investment decision(s). Statutory Details: Axis Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, sponsored by Axis Bank Ltd. (liability restricted to Rs. 1 Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment Manager: Axis Asset Management Co. Ltd. (the AMC). Risk Factors: Axis Bank Limited is not liable or responsible for any loss or shortfall resulting from the operation of the scheme. No representation or warranty is made as to the accuracy, completeness or fairness of the information and opinions contained herein. The AMC reserves the right to make modifications and alterations to this statement as may be required from time to time.

The information set out above is included for general information purposes only and does not constitute legal or tax advice. In view of the individual nature of the tax consequences, each investor is advised to consult his or her own tax consultant with respect to specific tax implications arising out of their participation in the Scheme. Income Tax benefits to the mutual fund & to the unit holder is in accordance with the prevailing tax laws as certified by the mutual funds consultant. Any action taken by you on the basis of the information contained herein is your responsibility alone. Axis Mutual Fund will not be liable in any manner for the consequences of such action taken by you. The information contained herein is not intended as an offer or solicitation for the purchase and sales of any schemes of Axis Mutual Fund.

Past performance may or may not be sustained in the future.

Stock(s) / Issuer(s)/ Sector(s) mentioned above are for illustration purpose and should not be construed as recommendation.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.


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