5 Best Balanced Advantage Mutual Funds to invest in 2022

Top and Best Balanced Advantage Mutual Funds to invest in 2022 in IndiaHave you got scared when stock markets were tumbling during covid pandemic? Were you little concerned when stock markets were reaching new highs keeping valuations aside in the last 1.5 years? Were you concerned how stock markets would react due to uncertainty about Russia-Ukrain War? Equity markets could be volatile in the short term due to various local and global factors. If you are a mutual fund investor and worried about any such unexpected stock market volatilities and want to minimise risk, you can consider Balanced Advantage Funds. These funds would invest in a combination of equity and debt and dynamically adjust their asset allocations based on the valuations and market situations. Which are the 5 Best Balanced Advantage Mutual Funds to invest in 2022? Who can invest in these top balanced advantage funds in India?

Also Read: Best Systematic Withdrawal Plan (SWP) Mutual Funds to get regular income

What are Balanced Advantage Funds?

Balanced Advantage Funds also called Dynamic Asset Allocation Funds would invest in a mix of equity, debt and arbitrage opportunities.

These funds would adjust their equity allocation based on the valuations (price to book value). In case stock markets valuations are low, it would do more equity allocation. In case stock markets have expensive valuations, it would reduce equity allocation and increase allocations in debt and arbitrage opportunities.

Generally, these dynamic asset allocation funds would invest 65% in equity and balance in debt instruments and arbitrage opportunities. While equity provides growth, debt/arbitrate opportunities provide stable returns.

Benefits of investing in Balanced Advantage Funds

Here are the major benefits of investing in these funds.

#1 – It invests in a mix of equity, debt and arbitrage opportunities. While equity provides high returns, debt and arbitrage opportunities provide stable returns.

#2 – With the combination of equity and debt, these funds would provide risk adjusted returns.

#3 – Fund manager of these funds would keep an eye on abnormal fluctuations (e.g. covid pandemic or Russia-Ukraine War or high valuations) etc. and invest in equity and debt appropriately. Investors need not worry about such things to shift from equity to debt and vice versa.

Who can invest in Balanced Advantage Funds?

If you fall in any of the below categories, you can invest in these funds.

1) Investors aiming for aggressive portfolios beyond debt funds, however, want to minimize loss due to stock market corrections can invest in these funds.

2) Investors who want to invest in medium to long term, however, want to reduce risk, can invest in these funds.

3) Conservative investors who fall under low to moderate risk and would like to invest for the medium term to long term can consider these funds.

4) Senior Citizen investors with moderate risk and looking for stable returns can invest in these funds.

5 Best Balanced Advantage Mutual Funds to invest in 2022

Here is the list of 5 Top Balanced Advantage Funds to invest in 2022 in India.

#1 – Edelweiss Balanced Advantage Fund

#2 – HDFC Balanced Advantage Fund

#3 – ICICI Pru Balanced Advantage Fund

#4 – Nippon India Balanced Advantage Fund

#5 – Aditya Birla Sun Life Balanced Advantage Fund

Top Balanced Advantage Funds in 2022 – Performance & Risk Statistics

Now that we have seen the list of top balanced advantage funds, let us check the fund performance and risk statistics.

#1 – Edelweiss Balanced Advantage Fund

Funds Investment Strategy

The scheme will invest in arbitrage opportunities, equity derivative strategies, pure equity investments and the balance in debt and money market instruments.

Funds Performance and Risk Statistics

This fund has a low beta of 0.61. Beta refers to the volatility of the fund compared to its benchmark (which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

This fund has a high alpha of 5.65. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.

Currently it invests 65% in equity, 30% in debt instruments and balance holds in cash.

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 43% of the times
  • 8% to 12% returns – 38% of the times
  • < 8% returns – 19% of the times
  • Negative returns – Zero times

From a 5 year rolling return perspective (to 2013 where direct funds data are available), this fund generated:

  • Over 12% returns – 44% of the times
  • 8% to 12% returns – 33% of the times
  • < 8% returns – 23% of the times
  • Negative returns – Zero times
Performance & Risk Metrics Edelweiss Balanced Advantage Fund
Value Research Rating 5 Star
3 Years – SIP Returns 19%
5 Years – SIP Returns 16%
Returns since inception 13%
AUM –  Crores 7,472
Expense Ratio 0.45%
Risk Grade Average
Return Grade High

This fund generated 13% annualized return since inception in 2013 (direct fund). Considering its outstanding performance in the category and low expense ratio, it is one of the Best Balanced Advantage Mutual Fund to invest in 2022.

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#2 – HDFC Balanced Advantage Fund

Funds Investment Strategy

The Scheme seeks to provide long term capital appreciation / income from a dynamic mix of equity and debt investments.

Funds Performance and Risk Statistics

This fund has a beta of 1. Beta refers to the volatility of the fund compared to its benchmark (which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

This fund has a minimal alpha of 0.1. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.

Currently it invests 64% in equity, 18% in debt instruments and balance holds in cash.

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 33% of the times
  • 8% to 12% returns – 27% of the times
  • < 8% returns – 30% of the times
  • Negative returns – 10% of the times

From a 5 year rolling return perspective (to 2013 where direct funds data are available), this fund generated:

  • Over 12% returns – 60% of the times
  • 8% to 12% returns – 23% of the times
  • < 8% returns – 17% of the times
  • Negative returns – Zero times
Performance & Risk Metrics HDFC Balanced Advantage Fund
Value Research Rating 1 Star
3 Years – SIP Returns 22%
5 Years – SIP Returns 16%
Returns since inception 14%
AUM –  Crores 41,708
Expense Ratio 1.03%
Risk Grade High
Return Grade Above Average

This fund generated 14% annualized return since inception in 2013 (direct fund). Considering its superior performance in the category and high SIP returns, It is one of the Top Balanced Advantage Mutual Fund to invest in 2022.

#3 – ICICI Pru Balanced Advantage Fund

Funds Investment Strategy

The scheme seeks to provide capital appreciation and income distribution to the investors by using equity derivatives strategies, arbitrage opportunities and pure equity investments.

Funds Performance and Risk Statistics

This fund has a low beta of 0.75. Beta refers to the volatility of the fund compared to its benchmark (which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

This fund has an alpha of 0.77. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.

Currently it invests 39% in equity, 28% in debt instruments and balance is held in cash.

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 28% of the times
  • 8% to 12% returns – 48% of the times
  • < 8% returns – 23% of the times
  • Negative returns – 1% of the times

From a 5 year rolling return perspective (to 2013 where direct funds data are available), this fund generated:

  • Over 12% returns – 47% of the times
  • 8% to 12% returns – 43% of the times
  • < 8% returns – 10% of the times
  • Negative returns – Zero times
Performance & Risk Metrics ICICI Prudential Balanced Advantage Fund
Value Research Rating 4 Star
3 Years – SIP Returns 15%
5 Years – SIP Returns 13%
Returns since inception 13%
AUM –  Crores 38,606
Expense Ratio 0.97%
Risk Grade Average
Return Grade Above Average

This fund generated 14% annualized return since inception in 2013 (direct fund). Considering its outstanding performance in the category and high SIP returns, it It is one of the Best Balanced Advantage Funds in 2022 in India.

#4 – Nippon India Balanced Advantage Fund

Funds Investment Strategy

The scheme seeks to capitalize on the potential upside in the equity markets while attempting to limit the downside by dynamically managing the portfolio through investment in equity & equity related instruments and active use of debt, money market instruments and derivatives.

Funds Performance and Risk Statistics

This fund has a low beta of 0.68. Beta refers to the volatility of the fund compared to its benchmark (which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

This fund has an alpha of 0.34. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.

Currently it invests 53% in equity, 26% in debt instruments and balance is held in cash.

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 35% of the times
  • 8% to 12% returns – 36% of the times
  • < 8% returns – 29% of the times
  • Negative returns – zero times

From a 5 year rolling return perspective (to 2013 where direct funds data are available), this fund generated:

  • Over 12% returns – 53% of the times
  • 8% to 12% returns – 30% of the times
  • < 8% returns – 17% of the times
  • Negative returns – Zero times
Performance & Risk Metrics Nippon India Balanced Advantage Fund
Value Research Rating 3 Star
3 Years – SIP Returns 14%
5 Years – SIP Returns 12%
Returns since inception 12%
AUM –  Crores 5,735
Expense Ratio 0.76%
Risk Grade Average
Return Grade Average

This fund generated 14% annualized return since inception in 2013 (direct fund). Considering its consistent performance in the category, low expense ratio and high SIP returns, it It is one of the Best Balanced Advantage Mutual Funds in India.

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#5 – Aditya Birla Sun Life Balanced Advantage Fund

Funds Investment Strategy

The Scheme seeks to generate long term growth of capital and income distribution with relatively lower volatility by investing in a dynamically balanced portfolio of Equity & Equity linked investments and fixed-income securities.

Funds Performance and Risk Statistics

This fund has a low beta of 0.76. Beta refers to the volatility of the fund compared to its benchmark (which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

This fund has an alpha of 0.44. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.

Currently it invests 49% in equity, 32% in debt instruments and balance it holds in cash.

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 30% of the times
  • 8% to 12% returns – 36% of the times
  • < 8% returns – 33% of the times
  • Negative returns – 1% of the times

From a 5 year rolling return perspective (to 2013 where direct funds data are available), this fund generated:

  • Over 12% returns – 31% of the times
  • 8% to 12% returns – 58% of the times
  • < 8% returns – 11% of the times
  • Negative returns – Zero times
Performance & Risk Metrics Aditya Birla Sun Life Balanced Advantage Fund
Value Research Rating 3 Star
3 Years – SIP Returns 15%
5 Years – SIP Returns 12%
Returns since inception 12%
AUM –  Crores 6,560
Expense Ratio 0.46%
Risk Grade Above Average
Return Grade Above Average

This fund generated 14% annualized return since inception in 2013 (direct fund). Considering its consistent performance in the category, high SIP returns and low expense ratio, it It is one of the Best Balanced Advantage Funds for 2022.

List of Top 5 Balanced Advantage Funds for 2022 – Annualised Returns

Mutual Fund Name 1 Year 3 Years 5 Years
Edelweiss Balanced Advantage Fund 14% 17% 14%
HDFC Balanced Advantage Fund 19% 14% 12%
ICICI Prudential Balanced Advantage Fund 12% 13% 12%
Nippon India Balanced Advantage Fund 11% 12% 11%
Aditya Birla Sun Life Balanced Advantage Fund 12% 12% 11%

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Suresh KP

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