5 Reasons why choose SBI Balanced Advantage Fund
#1 Dynamic Allocation Edge
SBI Balanced Advantage Fund offers the flexibility to invest across asset classes dynamically. Basis several parameters, the fund manager will have complete flexibility to maneuver assets in the range of 0 – 100% across asset classes. This will help the Fund Managers in arriving at the optimal mix of assets with the aim of achieving risk-adjusted returns
Scheme Structure to derive multiple benefits to the investor –
| Particulars | % Allocation Range |
| Equity & Equity related instruments | 0% – 100% |
| Fixed Income | 0% – 100% |
| Units issued by REITs & InvITs | 0% – 10% |
#2 Diversification to provide better risk-adjusted returns
Diversification across asset classes to balance the risk and reward:
- The Equity portion comprises two components – long equity to generate higher alpha & arbitrage portion to provide a hedge against a volatile market.
- Fixed Income & equivalent instruments in the portfolio help provide portfolio stability, mitigate
downside risk and provide modest returns.
#3 Tax Efficiency
- The fund will endeavour to provide an equity taxation if gross equity exposure is having 65% and above* thus reducing tax burden on an investor coupled with better post tax returns. Please refer to SID for details disclosure of taxation.
#4 Robust Portfolio Construction process
For constructing the portfolio, the fund will endeavor to follow a three-tiered approach to achieve its
strategy.
- Tier I would be to determine the asset mix of the portfolio and hence deciding the Equity & Debt allocation. Asset allocation at any given point of time will be decided by the Fund Managers, using parameters such as Sentiment Indicator, Valuations & Earnings Drivers.
- Tier II would be to determine the style skewness. Factors like allocation to different market cap (large/ mid/ small), sector preference and value/growth preference, would be decided in this step.
- Basis the above two, Tier III would be the stock/ security selection. Stock/ Security selection would be based on the highest conviction ideas of Fund Managers & Analysts. On the fixed income side, the aim to have high credit/ sovereign portfolio to maintain liquidity in the fund and seek to generate alpha by duration management across the yield curve.
#5 Regular income through SWP (A) facility
- Pre-defined withdrawal: SWP(A) facility will facilitate investors to withdraw a fixed percentage, or any other amount as specified by an investor basis one’s requirement to meet regular cashflows.
- Fixed Payouts: The facility has an option available to investors to withdraw specific % of cost of investment, thus ensuring fixed payouts till the enrolment period expires or the unit balance in the folio is greater than the withdrawal amount as specified by an investor, whichever is earlier.
- Tax Efficiency: The facility is a more tax efficient as the capital gains realised on the units withdrawn from an equity-oriented scheme after 1 year from the date of allotment will attract long term capital gains of 10% unlike other regular payout options like dividends, interest etc. which are taxed in the hands of investor at the applicable tax slab. Please also refer to tax efficiency section in point no. 3.
- Flexibility of Withdrawal: The investor has the flexibility to choose frequency & amount as per the terms of the facility and also has an option to discontinue the facility at his discretion with prior intimation.
