Balanced-advantage funds: Are they the right choice for regular income?

Mr Naresh Gupta, a non-pensioner super senior citizen living in Delhi, recently took out fixed deposits (FDs) to manage his household expenses. However, he needed a regular income and sought our advice on whether to invest in a balanced-advantage fund (as suggested by his friend) for this purpose. What are balanced-advantage funds? Balanced-advantage funds, also dynamic asset allocation funds, are a type of hybrid funds that invest in both equity and debt instruments. Unlike equity and debt funds that have fixed investment mandates, balanced-advantage funds have a dynamic equity-debt allocation. Broadly speaking, these funds put more money in equities and less in debt when markets are depressed, and vice versa

This article was originally published on April 28, 2023.