How Investing in ICICI Balanced Advantage Fund Beneficial in Market Volatility?

There is a famous saying in America that the time to prepare for a perfect storm is not when the wind is tearing the roof off your house, but before the storm hits. This saying works fit for the financial market which is highly volatile as of now, and investors should balance their portfolio by investing in diversified assets. This will help them to protect their capital and work for long-term capital appreciation. One such fund in the category that is analysed by the financial analysts of MySIPonline is ICICI Prudential Balanced Advantage Fund. The fund has adopted the dynamic asset allocation approach which helps the investor to increase diversification in their portfolio.

An Overview of ICICI Prudential Balanced Advantage Fund

How Can Re-Balancing Portfolio Downside Risk?

The dynamic asset allocation of ICICI Prudential Balanced Advantage includes such portfolio which manages physical securities such as stocks or bonds, or implementing overlay-based strategies including arbitrage opportunities. This replaces the complexity for the investors as well as reduces their overall risk.

At the same time, the risk measures of the fund also show that it is less volatile than its category. The SD of the fund is lower than its peers as well as the benchmark. Higher Sharpe ratio also shows that the fund can manage to offer risk-adjusted returns which make it one of the best funds in the category.

As per the financial analysts of MySIPonline, the fund has performed well than other funds which is cleary seen through its alpha that is negative, but outperforming its category. All these facts show that it is a good fund that helps the risk-averse investors to downside risk in their portfolio by re-balancing capital in multiple assets.

Besides this, if we look at the overall performance of the fund, it has performed well in the overall market cycles. When in the year 2014 and 2015, the market was going through bull and bear phase, both and Sensex had delivered the CAGR of 5.4%, but it has given the CAGR of 15% approximately.

These returns depict that the fund keeps the technique to perform well even when the market takes a downturn. This also reduces the overall risk for the investors, as the fund management team has the calibre to offer sustainable returns by reducing the volatility.

Benefits in Volatile Market

ICICI Prudential Balanced Advantage Fund Growth Scheme invest across various assets on the basis of the market conditions. It increases or decreases its exposure to the equities on the basis of the market valuations and volatility. It uses price to book value (P/BV) measure to decide its allocation strategy and changes allocation in equities and debt depending on the P/BV ratio prevailing in NIFTY. This investment strategy diminishes the volatility in the portfolio of the fund and helps investors to minimise risk.

In sharp corrections also, a mix of debt and equity portfolio would face lower volatility than a pure equity fund. As per the financial analysts of MySIPonline, this mix of assets will give a good experience to the one who is not penchant to high-risk as well as novice investors.

Therefore, the investors who have invested in equity funds or don’t want to invest in pure equity schemes due to the volatility can invest in ICICI Prudential Balanced Advantage Fund G, which will limit the downside risk without hitting returns too much.

For more information regarding this fund, you can connect with us via call or email. You can also submit your queries regarding investment in the regular plan of ICICI Pru Balanced Advantage submit it here https://goo.gl/WofRJm, and we will get back to you as soon as possible. 

Why Should You Invest in SBI Magnum Low Duration Fund?

There are a number of ways in which you can invest, the one trending these days is investment in mutual funds. There are numerous options present in the market in the form of innovative investment schemes. SBI Magnum Low Duration Fund by SBI Mutual Fund is one among the many suitable for conservative investors.

The investment objective of this scheme is to help investors earn regular income by investing in debt and money market instruments by providing liquidity at all times. This is an open-ended scheme with the macaulay duration of the investment lying between 6 to 12 months. Formerly, this scheme was known as SBI Ultra Short Term Debt Fund.

Top Four Reasons to Invest in SBI Low Duration Fund Growth

Below reasons, as to why one should invest in this scheme, have been shortlisted by the experts at MySIPonline after conducting intensive research.

1. Asset Diversification - This scheme has invested across different low duration securities which include AAA, A1+, AA, cash equivalent, etc. Diversifying the assets across a variety of instruments is a right decision as it leads to diversification of risk. The correct selection of the investment portfolio also increases the chances of better earnings.

2. Good Returns - In one year time period, the rate of return generated by this scheme is 6.63% which is more than both its category and benchmark CCIL T Bill Liquidity Weight. In three years time, the returns generated by this scheme is though more than that generated by its benchmark but less than its category’s returns. Talking of the five years time period, it has again succeeded in surpassing the return rate of both the others.

3. Robust Risk Management System - The standard deviation of this scheme is more than its benchmark’s SD but less than its category’s standard deviation. The Beta of the scheme is again less than that of its category. This states that the scheme is less likely to fluctuate in response to the market conditions. The Sharpe ratio of this scheme is 1.27 which is greater than both its benchmark and category’s ratio. This confirms that it has generated good return with the risk taken.

4. Consistent Performer - Talking of consistency, this scheme has generated continuous returns for one, three, five, and seven year in the form of 6.63%, 7.33%, 8.09%, and 8.38%. Looking at these rate of returns, it can be estimated that the performance of this scheme is consistent. Below is the performance graph showing the trailing returns for the period of October 2017 to September 2018.

A Final Note

Investors who wish to park their money for a short-term may invest in SBI Magnum Low Duration Fund by SBI MF. From the above description, it can be estimated that this fund seems to yield optimum and consistent returns with proper risk management and asset allocation. You may invest in it via simple online investment procedure at MySIPonline. In case you have any query regarding regular funds, feel free to post the same here.