InvestorQ : How about investing in dynamic asset allocation funds?
Suhani Mirza made post

How about investing in dynamic asset allocation funds?

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leah Diaz answered.
8 months ago
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Dynamic Asset allocation funds or Balanced Advantage Funds are hybrid funds that invest in a mix of asset classes. They usually invest in equity, debt, equity derivatives, real estate, etc., and are managed dynamically. Based on the investment objective of the fund, the fund manager determines the asset allocation for the fund. The fund manager actively monitors the investments and rebalances the portfolio based on the market conditions to keep it in line with the investment objective.

In times of volatility, the fund re-balances efficiently, thus providing investors some sense of safety. These funds are best suited for the long-term Investors who though have a low-risk appetite but are ready to take a bit of risk to enjoy the returns from an equity-debt mix of assets in their portfolio.

Investors looking for low volatility within equities, who do not understand when to buy and sell, have a medium risk appetite, and are ready to be invested in these funds for a minimum of 3 to 5 years can look at venturing in these funds in their equity portfolios. A word of caution- you need to choose these funds after ascertaining the extent of volatility/risk you are comfortable with. You should not expect these funds to deliver returns on par with other actively managed equity funds which take exposure to equity up to 90%.
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