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How are balanced and balanced advantage funds different?

Dhirendra Kumar tells the difference between balanced fund and balanced advantage fund

What is the difference between balanced and balanced advantage funds? Which one of them is safer and would give higher returns?
-Solanki

Balanced funds are pretty straight forward hybrid funds. After the change in regulations regarding mutual fund classification, balanced funds are now called aggressive hybrid funds. They invest between 65 to 80 per cent in equity and the remaining in debt. In balanced advantage funds, usually around 33 per cent is invested in pure equity and the other 33 per cent in arbitrage to keep the gross equity exposure of at least 65 per cent. The remaining is invested in debt. Equity arbitrage opportunities have characteristics of debt but it has its tax treatment is like equity.

So, balanced advantage funds might turn out to be relatively safer and less volatile. But they will also yield lower returns over the long term as compared to aggressive hybrid funds, which will have a firm allocation of at least 65 per cent in equity. This usually goes up to 75 per cent.

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