What is a general perception when you hear the word mutual funds investment? I bet the first thing that crosses your mind will be “risk” i.e. if you have never invested in mutual funds. But should that bother you when you have a successful moderator working for your investment funds in the market? Well, you would be interested to go through the article to know more about Mutual Funds.
To all the readers who are not well-versed with Mutual Funds, here is a brief description:
Mutual Fund investments are investments made in companies or firms which are public listed on National Stock Exchange / Bombay Stock Exchange. The returns on such investments depends upon the company’s performance and the overall market.
Why should you invest in Mutual Funds when you have a safer option of FD’s (Fix Deposits) you may ask?
The answer would be though mutual funds are not as safe as a FD deposit, still if mutual funds are invested in right companies comparing their past records and management, then the returns on yearly basis are much higher competitively and there is more flexibility plus tax benefits.
Talking about Mutual Funds investment and risk, a balance is needed, which could yield a better dividend and is safer to investment in, here is where a unique plan from ICICI Prudential Mutual Fund steps in, the “Balanced Advantage Fund” scheme which is an open-ended equity oriented fund that brings multiple benefits to your investments. It strives for growth by investing in equity markets, while providing relative safety through investments in debt instruments.
I would like to share some interesting facts and figures to illustrate on why the ICICI Prudential Balanced Advantage Fund is a good choice.
The objective of this fund is to create wealth over a long period of time through a balanced investment in equity markets as well as debt markets and money instruments. It also aims to do this by mitigating the risk from equity markets as much as possible by not sticking to a single strategy alone.
- Benefit from an in-house asset allocation model that aims to buy low & sell high
- Aim to gain from market volatility over the long term
- Invests in both equity & debt instruments
- Provides tax-free returns#
- Aims to provide month-on-month tax-free dividends$
- Manage your monthly cash flow with Automatic Withdrawal Plan^ & Monthly Dividend Feature
#As per prevailing tax laws for FY16-17, returns earned after one year are tax free.
$Distribution of dividend is subject to approval from Trustees & availability of distributable surplus
^Automatic Withdrawal Plan is only a feature for regular withdrawal from the scheme and shall not be construed as an assurance or guarantee of return.
A 3-in-1 fund
BAF may be considered to be three funds rolled into one. When valuations become expensive the fund’s equity allocation can fall to as low as 30%. In such market conditions, the fund resembles a monthly income plan (MIP). When the market becomes fairly valued, the fund raises its allocation to equities to 65%, thereby resembling a balanced fund. And when market valuations decline, it raises its allocation to equities to the maximum limit of 80%. At such times it resembles an equity fund. Thus, it can be viewed as a three-in-one product, with the added benefit of being taxed like an equity fund.
BAF’s ability to perform in all market conditions makes it a very good fund for people with low to moderate risk appetite, who have invested in FDs all their lives but now want a moderate taste of equities. This is a fund for investors who don’t want to be bothered about questions such as: the market has risen (or fallen), should I book profit or stay put? The fund takes care of all these issues on investors’ behalf.
Thanks to BAF’s stellar performance, investors have reposed their faith in it. The fund’s asset under management (AUM) has risen from Rs. 204 crore in March 2013 to over Rs. 10,000 crore in November 2015, a 47-fold growth over just two-and-a-half years.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully