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Time of India
an hour ago
- Business
- Time of India
Balanced advantage vs. Multi Asset Allocation Mutual Funds: Which should investors choose?
Balanced Advantage / Dynamic Asset Allocation Funds Live Events Multi Asset Allocation Funds Key differences Which fund type should one choose? Way forward for these categories In the diverse universe of mutual funds , understanding the distinction between various hybrid categories is crucial to making informed decisions. Two popular choices for investors seeking a balanced risk-return approach are Balanced Advantage Funds (BAFs), also known as Dynamic Asset Allocation Funds (DAAFs), and Multi Asset Allocation Funds While both aim to manage market volatility and deliver consistent returns, they differ significantly in structure, asset composition, and investment philosophy. Here's a breakdown of how they work and how investors can choose between advantage funds or dynamic asset allocation funds are designed to dynamically shift between equity and debt based on changing market conditions. Fund managers use internal models that assess valuation metrics, momentum, and macroeconomic indicators to decide how much exposure should be allocated to equity or debt at any given time. The equity allocation in these funds can vary widely, typically ranging from around 30% to over 80%, depending on the fund house's model. The debt portion acts as a buffer, helping reduce volatility during market downturns.A unique advantage of BAFs is that many of them maintain an average equity exposure above 65%, often through arbitrage positions. This allows them to qualify for equity taxation, which is more favourable than debt taxation over the long term. The goal of these funds is to provide stable, equity-like returns while limiting downside risks through timely asset rebalancing. Investors who want market participation without full equity volatility often find BAFs an attractive core asset allocation funds, as per SEBI guidelines, are required to invest in at least three asset classes — usually equity, debt, and commodities like gold — with a minimum of 10% in each. This structure inherently provides broader diversification compared to BAFs, as the inclusion of non-correlated assets such as gold helps reduce overall portfolio funds typically maintain a mix where equity forms the core, supported by fixed income instruments and gold or other commodities. Unlike BAFs that dynamically change their equity-debt allocation based on models, Multi Asset Funds often rebalance periodically rather than tactically. The objective here is to deliver stable returns across different market cycles, relying on the varying performance of asset classes rather than frequent tactical shifts. For investors who believe in the long-term benefits of diversification across asset classes, multi asset funds offer a one-stop most fundamental difference lies in the asset mix. While BAFs primarily toggle between equity and debt based on valuation models, Multi Asset Allocation Funds include at least three asset classes and maintain a minimum allocation to are typically more dynamic, with frequent shifts between asset classes to respond to short-term market movements. In contrast, multi asset funds may follow a more stable rebalancing strategy, providing smoother returns but potentially lower agility during sharp market terms of taxation, most BAFs enjoy equity taxation because they maintain the required equity exposure through direct holdings or derivatives. Multi Asset Funds, however, may not always qualify for equity taxation depending on the actual breakdown of the portfolio, which could affect post-tax balanced advantage funds enjoy equity taxation which means investors who hold for more than a year pay 12.5% tax. In the case of multi-asset funds, some schemes that allocate more than 65% to equity enjoy equity taxation. However, there are some conservative schemes that have 35-65% allocated to equity, where investors who hold for more than 2 years pay tax at 12.5%, while those that sell before 2 years pay slab-based distinction is that while BAFs usually exclude commodities, Multi Asset Funds mandate exposure to gold or other non-equity, non-debt assets, offering better diversification in times of inflation or global Advantage or Dynamic Asset Allocation Funds are ideal for investors who want active equity participation but with an in-built cushion during market downturns. These funds are particularly useful for conservative investors looking for equity exposure without fully bearing the volatility of the stock market. They are also suitable for long-term investors who prefer tax-efficient options and want the fund manager to adjust allocations based on market the other hand, Multi Asset Allocation Funds are a good fit for investors who value broad diversification and want exposure to different asset classes like gold, which can act as a hedge during economic instability or inflation. These funds tend to be more conservative in their allocation and are appropriate for moderate-risk investors who believe in riding different market cycles through asset diversification rather than timing or tactical Balanced Advantage and Multi Asset Allocation Funds serve the purpose of managing portfolio risk, but through different mechanisms. While BAFs rely on dynamic shifts between equity and debt based on market signals, Multi Asset Funds take a more structured diversification route involving a broader set of asset choice should ultimately depend on your investment goals, risk tolerance, and belief in either tactical allocation or strategic diversification. In many cases, combining both types within a portfolio can create a well-rounded investment strategy suited for various market the investor has a medium- to long-term horizon, partial deployment in balanced advantage or multi-asset funds can serve as a middle ground, offering market participation with downside buffers,' Sagar Shinde, VP Research, Fisdom shared with sharing the way forward for multi asset allocation funds, Vishal Dhawan, CEO, Plan Ahead Wealth Advisors, a wealth management firm in Mumbai told ETMutualFunds that one can hold multi asset allocation funds in the portfolio especially in volatile markets as they can help preserve capital and deliver more stable returns over time compared to pure equity funds.'Gold, for instance, has emerged as one of the strongest-performing asset classes in recent years, especially during times of global uncertainty. Its presence in the portfolio can act as a natural hedge, offering protection when equities are under pressure. However, it is important for investors to understand the fund's asset allocation model and strategy as this will influence how the fund performs across different market cycles,' Dhawan adds.
News18
3 hours ago
- Business
- News18
From EPFO To Form 16 To Mutual Fund, Credit Card Rules: Know Key Financial Changes From June 1
Last Updated: Starting June 1, 2025, new rules will affect mutual funds, credit cards, and FD. SEBI revised cut-off times, banks updated credit card policies, and EPFO 3.0 will launch. Starting June 1, 2025, several financial rule changes will take effect that could impact your finances. From mutual fund regulations to credit card updates, EPFO advancements, and fixed deposit interest rate revisions, here are the key personal finance changes to be aware of. SEBI's New Rules for Overnight Mutual Funds The Securities and Exchange Board of India (SEBI) has revised the cut-off timings for overnight mutual fund schemes. Effective June 1, 2025, the new cut-off time will be 3 pm for offline transactions and 7 pm for online transactions. Transactions made after these times will be processed the next business day, potentially affecting the applicable net asset value (NAV). Overnight mutual funds invest in government securities maturing in one day and are favoured for their low-risk profile. This move aims to streamline fund operations, particularly for pledging. Credit Card Rule Changes Credit card users, especially those with Kotak Mahindra Bank, HDFC Bank, and Axis Bank cards, should note several changes this month. From 1 June, Kotak Mahindra Bank will introduce caps on reward points across categories such as fuel, rent, utility bills, and insurance. A 1% transaction fee will apply to fuel payments exceeding the monthly threshold. Rent and education payments will also incur a 1% charge regardless of the amount. Other charges will apply to wallet loads and online gaming. From 10 June, HDFC Bank will revise its lounge access policy for Tata Neu Infinity and Tata Neu Plus cardholders. Lounge access will be offered via vouchers based on spending, replacing the previous swipe-based system. EPFO 3.0 Expected Rollout The Employees' Provident Fund Organisation (EPFO) is expected to launch EPFO 3.0 in June, according to DD News. It is expected to facilitate instant PF withdrawals through ATMs and UPI, balance checks via UPI apps, and faster claim processing. A more efficient grievance redressal system is also anticipated. Form 16 Deadline For ITR Filing The deadline for employers to issue Form 16 to salaried employees is June 15. This certificate is crucial for income tax return filing. Aadhaar Deadline June 14 is the last day for free Aadhaar detail updates on the myAadhaar portal. Subsequently, updates will cost Rs 25 online and Rs 50 at Aadhaar centres. LPG Price Revision Oil companies revise LPG cylinder prices on the first of each month. Following a price cut in May, a new update is expected on June 1. FD Interest Rate Cuts Suryoday Small Finance Bank will reduce its fixed deposit rates by up to 60 basis points from June 1 for deposits below Rs 3 crore. The new rates will range from 4% to 8.4%. First Published:
Business Standard
10 hours ago
- Business
- Business Standard
Lippi Systems Ltd
In continuation of our letter dated 22nd May 2025 and Pursuant to the Regulation 30 and 33 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 as amended from time to time we wish to inform that the Board of Directors of the Company at their meeting held today i.e. Friday 30th May 2025 have inter alia considered and approved the following matters:1. Annual Audited Financial Results2. Appointment of M/s Kunal Sharma & Associates Company Secretaries as Secretarial Auditor of the Company3. Appointment of M/s Aswani & Associates Chartered Accountants firm as an Internal Auditor of the Company for the Financial Year ended 31st March 20264. Adoption of amended Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information
Business Standard
10 hours ago
- Business
- Business Standard
Margo Finance Ltd
We wish to inform you that at the Board Meeting held today i.e. on 30th May 2025 the Board of Directors of Margo Finance Limited (the Company) approved the Audited Standalone Financial Results of the Company for the quarter and year ended 31st March to Regulation 30 and 33 of SEBI (Listing Obligations and Disclosure Requirements) 2015 (Listing Regulations) we are enclosing herewith the following:1. Audited Standalone Financial Results of the Company for the quarter and year ended 31st March 20252. Independent Auditors Report on Audited Standalone Financial Results of the Company for the quarter and year ended 31st March 2025 issued by M/s. Pawan Shubham & Co. Statutory Auditors of the Company and3. Declaration on Auditors Report with unmodified opinion pursuant to Regulation 33(3)(d) of the Listing Regulations signed by Mr. Shri Dass Maheshwari Chief Financial Officer of the Company.
United News of India
11 hours ago
- Business
- United News of India
SEBI bars actor Arshad Warsi, wife, brother from market for violating rules
Mumbai May 30 (UNI)The Securities and Exchange Board of India (SEBI) on Friday barred Bollywood actor Arshad Hussain Warsi, his wife Maria Goretti Warsi and others from accessing the securities market for a period of one year, following their alleged involvement in a coordinated 'pump and dump' scheme related to shares of Sadhna Broadcast Limited (SBL). The regulator imposed a fine of Rs 5 lakh each on Arshad and his wife Maria and restrained them from the securities market for 1 year, as per an order passed by SEBI on Thursday The regulator also barred 57 other entities and persons including Warsi's brother Iqbal Warsi from the market for periods ranging from one to five years. The order passed by SEBI Whole Time Member Ashwani Bhatia notes that Arshad Warsi, his brother Iqbal and Goretti were complicit in the market manipulation scheme orchestrated by the mastermind, Manish Mishra. The probe was initiated after complaints were received between July and September 2022 alleging stock price manipulation in Sadhna Broadcast shares, promoted by misleading YouTube videos and a large-scale paid marketing campaign. UNI AAA SSP
