Balanced advantage funds: Investor takeaway

We are skeptical of a promise that hinges on 'timing' the market. In fact, our analysis proves that BAFs do not have a mantra to consistently time the market. When the markets crashed in March 2020, even these funds gave huge negative returns because no model can predict situations like the pandemic. After the mayhem, almost all dynamic funds increased their equity allocation significantly to reap the benefits of low stock prices. But after three-four months, they reduced the equity exposure, even though the market continued to make new highs for more than a year. We believe that static asset allocations (75:25, 50:50, 25:75) based on your time horizon and ability to take risk can deliver the right outcomes in the long run rather than trying to pre-empt market moves (based on models or human judgement) and shifting allocations accordingly. Investors looking for a low allocation to equity can go for conservative hybrid funds and equity savings funds. For those who want