The Rs 1,458-crore balanced advantage fund will remain an open-ended dynamic asset allocation fund managing exposure actively between equity and fixed income, Anupam Tiwari, equity fund manager at the fund house, told PTI on Friday.
Tiwari said repositioning is effective from October 1.
With this, the fund house aims to become a prominent player in the balanced advantage fund category, he said adding that the fund will now have greater flexibility to invest in a particular asset class with the minimum range of zero per cent to a maximum range of 100 per cent in both equity and fixed income.
The fund also has the provision to invest 0-10 per cent in units issued by REITs and InvITs.
He said the asset allocation is guided by an in-house proprietary methodology that allows them to manage equity exposure in response to changes in the underlying market conditions and thus giving a better option to investors who have a longer timeframe in mind.
This dynamic nature makes it an ideal investment solution for all investors as the fund not only manages to navigate market volatility better but also focuses on wealth creation over the long term, he said.
Explained the rationale behind the move, Tiwari said the inherently volatile nature of equities can sometimes lead to abnormality in prices in the near term, which influences investor behaviour and leads investors to buy at market peaks and sell at market lows, causing massive wealth destruction.
He, however, added that this risk and heavy loss can be mitigated if investors are given a product that has intelligent risk management built in its core. Tiwari claimed that the Axis balanced advantage fund is such a product that offers a solution to this basic problem for investors.
The fund has so far this year given 27 per cent returns and 8.4 per cent last year and 9 per cent in the previous year.
Axis MF Managing Director and CEO Chandresh Nigam said balanced advantage funds allow investors to mitigate equity risks through a structured process that manages equity exposure dynamically. “Thus, they can help transform investing experience by allowing investors to benefit from the long-term growth potential of equity while managing its risk.”
With 10-11 equity funds worth over Rs 1.1 lakh crore of AUM, Axis MF is the market leader in pure open-ended equity funds. This means that a little over 50 per cent of its total AUM of Rs 2.1 lakh crore is parked in equities, and the rest in the spread between 4-5 hybrid funds, and debt and fixed income.
