Should I exit HDFC Balanced Advantage Fund?

Kindly advise whether or not to maintain holding of HDFC Balanced Advantage Fund for the final three and a half years. Value of fund is constantly lesser by 7%. However, some dividend is being paid repeatedly. Say ₹0.230 per unit.

-Subrahmanyam

Balanced Advantage Funds are hybrid funds that spend money on each fairness and debt. The allocation throughout fairness and debt is just not mounted and preserve altering based mostly in the marketplace outlook and views of the fund administration staff. Balanced Advantage Funds are good for conservative traders who wish to generate increased returns than debt with restricted danger.

However, HDFC Balanced Advantage Fund is managed extra aggressively than its friends and doesn’t use derivatives to scale back its fairness publicity under 65% of the corpus. The fund at current has near 70% in fairness whereas the friends had decrease fairness allocation. At the present market stage from a return perspective, this fund would have generated a better return in comparison with friends from the balanced benefit class due to excessive fairness allocation, but it surely additionally provides extra volatility. You can not evaluate balanced benefit hybrid funds with fairness diversified funds because the fund could have an inexpensive allocation in debt on a regular basis. The fund has given returns of near 18% p.a. within the final three years which is truthful contemplating it’s a balanced fund and market situations in the course of the interval. If your funding horizon continues to be long-term even after holding it for 3 years and on the similar time you wish to take restricted danger then you might proceed to carry on along with your funding in HDFC Balanced Advantage Fund. If you want to take some extra danger and are prepared to present extra time then you possibly can change into an fairness diversified fund the place your cash might be invested in equities solely.

– Answer by Harshad Chetanwala, founder MyWealthGrowth.com

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