How Good Are Dynamic Asset Allocation Funds For You?
*Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully before making an investment
For all those who don’t know, Dynamic Asset Allocation is a portfolio management strategy such as mutual funds and index funds where an investor makes a long-term investment in a certain perhaps profitable asset security or class. In this type of investment, the investor timely buys and sells those asset securities so that the allocations can be kept in their original proportions.
For example, ICICI Prudential Balanced Advantage Fund;
It is an open-ended equity fund that helps bring many benefits to the investors. It endeavors for growth by making an investment in the equity market while provides a relative safety through making investments in debt instruments.
To simplify it, investment in cyclical stocks is easiest for making money. Means, buy when news is negative and sell when news is positive. These type of investments and stocks keep you busy and interested in stock market. Also, trends are difficult to analyze by all and hence it is better to avoid it. Therefore always prefer steady funds. Steady funds are for long term while thematic funds are not preferable.
Some points to keep in mind:
Investment in corporate bonds is similar to bank fixed deposits. They are usually done for yields. Debt fund is growing these days since it has tax benefits for 3 years. It has low interest rates but increasing liquidity in the market. Mutual funds are diversified and active management of exposures. For example the regular income fund, regular savings fund and corporate bond funds of ICICI prudential yield more interest than bank fixed deposits.
And if talking about ICICI prudential balanced advantage fund, equity allocation is between 30%-80%. This fund protects capital in falling markets and gets higher returns than the sensex levels. It has low volatility and high consistency.
Investing in ICICI prudential mutual fund will help you gain benefit from an in-house asset allocation model which strives to sell high and buy low. Not just this, but it also aims to procure from market volatility for a long-term. It helps invests in both debt as well as equity instruments. This fund is suitable for the investors who are looking for an equity fund which strives for growth by investing in derivatives and equity and are seeking for a long term wealth creation solution.
You can visit invest online by visit the official website HERE.
It is advisable that you consult you financial advisor before investing… after all, it’s your capital and it is always better to be 100% sure before making an investment.
Also read: Important Things You Must Know About TDS