An old trust methodology with crisis-proof capabilities
If you are an avid investor, chances are good that you have funds parked in a mutual fund system. Ease of investing, good return expectations and a less risky bet than investing in pure stocks are just a few of the advantages that make mutual funds an attractive investment category.
Depending on their needs and risk profile, there are different types of mutual funds available to investors. That being said, there are few plans that balance both equity and debt options as well as a balanced benefit fund.
Balanced Advantage Funds are a sub-category of hybrid mutual funds, which follow dynamic asset allocation. These funds invest in a mix of equity and fixed income instruments based on the internal models they manage. They allow the investor to diversify his portfolio, to resist market volatility and to limit losses when the market moves in the red.
Given these advantages, it is not surprising to see fund companies like Axis Mutual Fund exploring this category. The latest offering from the fund house, the Axis Balanced Advantage Fund, is a reshaped avatar and repositioning of its Axis Dynamic Equity Fund.
The new scheme aims to offer investors a product of capital appreciation and income generation over the long term. The fund decides on equity exposure based on a proprietary internal methodology that takes into account valuations and the market trend. The fund intends to allocate primarily large cap stocks and the current exposure to large caps is around 85%, with the balance devoted to small and mid cap stocks.
In an interesting conversation with YourStory, Anupam Tiwari, Equity Fund Manager, Axis Mutual Fund explained in depth why balanced benefit funds are worth the hype and what investors can expect from them. Axis Balanced Advantage Fund.
Here are some key points from the article:
The new fund corrects the shortcomings of the old
Anupam said that when the COVID-19 pandemic hit in 2020 and the markets were extremely volatile, the Axis MF team noticed some shortcomings in the Axis Dynamic Equity Fund model. “There was a lag between what the model could do and what the new business landscape demanded. Even in his new avatar, the basic philosophy and parameters of the fund remain the same. In other words, the inputs remain the same, but the way they work has changed. This way the fund could generate optimal returns even under abnormal circumstances like lock-ups, ”he said.
Beginner or seasoned investor, a fund at the service of all
If the “one size fits all” approach has takers, it would be Axis Balanced Advantage Fund. The new mutual fund system serves the interests of both amateur and experienced investors. Anupam described the fund as a perfect offer for investors who are wary of market volatility, but still want to invest in stocks.
“It is aimed at both seasoned and newbie investors. All investors want to keep some of their savings in a low volatility option. Axis Balanced Advantage Fund is aimed at all investor profiles, whether it is a young person who does not have a lot of savings or a seasoned investor who has been investing for 15 to 20 years. “
Combine the expertise of the fund manager with an algorithmic approach
Anupam explained at length how the fund combines the acumen of a fund manager with a model-driven approach to ensure optimal stock allocation and eliminate selection bias. He said: “The fund company does not involve any manual intervention when deciding how much equity to invest.”
The algorithm takes into account three parameters to decide on the allocation of stocks: the sliding price / earnings ratio, market volatility and a stock trend indicator to show whether the market is positively biased or not.
“We run the data collected over the past 15-20 years using a regression model and optimize equity allocation and risk. We then use the indicative stock allocation to establish the amount of stocks that will be invested at each level of the three parameters. there is no manual intervention and it is therefore completely impartial ”, explained Anupam.
* Investors should consult their financial advisors when in doubt as to whether the product is suitable for them
For a detailed asset allocation and investment strategy, please refer to the System Information Document.
About Axis AMC: Axis AMC is one of the fastest growing asset managers in India, offering a full suite of asset management products through mutual funds, portfolio management services and alternative investments .
Disclaimer: This press release represents the views of Axis Asset Management Co. Ltd. and should not be taken as the basis for an investment decision. Neither Axis Mutual Fund, Axis Mutual Fund Trustee Limited nor Axis Asset Management Company Limited, its directors or partners can be held liable for any damage, including loss of income or profit that may result from the use of the information contained in the this document. Investors are urged to consult their financial, tax and other advisers before making any investment decision. Statutory Details: Axis Mutual Fund was established as a trust under the Indian Trust Act, 1882, sponsored by Axis Bank Ltd. (liability limited to Rs. 1 Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment manager: Axis Asset Management Co. Ltd. (AMC). Risk Factors: Axis Bank Limited is not responsible for any loss or shortfall resulting from the operation of the program. No representations or warranties are made as to the accuracy, completeness or fairness of the information and opinions contained in this document. The CMA reserves the right to make changes and alterations to this statement as necessary from time to time.
The information set out above is included for general information purposes only and does not constitute legal or tax advice. Given the individual nature of the tax consequences, each investor is advised to consult their own tax advisor with respect to the specific tax implications arising from their participation in the Program. The tax benefits for the mutual fund and for the unitholder are in accordance with applicable tax laws, as certified by the mutual fund consultant. Any action taken by you based on the information contained in this document is your sole responsibility. Axis Mutual Fund will in no way be responsible for the consequences of such action taken by you. The information contained in this document is not intended to be an offer or a solicitation for the purchase and sale of any Axis Mutual Fund program.
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Action (s) / Issuer (s) / Sector (s) mentioned above are indicative and should not be interpreted as a recommendation.
Investments in mutual funds are subject to market risks, carefully read all documents relating to the plan.