Mutual funds: How dynamic asset allocation funds provide a feasible choice amid volatility? Experts weigh in
Live MintThe stock market slid on Monday in response to tremendous selling pressure on concerns around the HMPV virus, and on foreign institutional investors sell-off, resulting in benchmark indices declining by over 1.5 per cent. Dynamic asset allocation funds, also known as balanced advantage funds, are mutual fund schemes that invest in a mix of equity securities and fixed income instruments. Protect downside amid volatility The equity exposure in dynamic asset allocation funds is often decided based on several factors, including market trends, valuations, and the fund's specific mandate. Saurav Basu, Head, Wealth Management, Tata Capital says, “Dynamic asset allocation funds aim to deliver long-term capital appreciation with lower volatility by dynamically adjusting investments between equity, debt, and arbitrage opportunities. The systematic approach of dynamic asset allocation funds helps avoid such emotional investment mistakes," says Roopali Prabhu, CIO and Head of Products and Solutions, Sanctum Wealth.
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