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Why should we invest in LIC Balanced Advantage Fund?

 

LIC Balanced Advantage Fund


LIC Balanced Advantage Fund is an open-ended dynamic asset allocation fund and suitable for those investors who are seeking for,

  • Capital appreciation over a long period of time.
  • Investments in a dynamically managed portfolio of equity and equity related instruments, debt, and money market instruments.

Investment Objectives

The investment objectives of the LIC Balanced Advantage Fund is to provide a capital appreciation from a dynamic mix of equity, debt, and money market instruments. The scheme seeks to reduce the volatility by diversifying  the assets across equity, debt, and money market instruments.

Benchmark

Hybrid Composite 50:50 Index

Risk Factors

  • Scheme Specific Risk Factors
    • Risk associated with investments in Equities.
    • Investments in Derivatives.
    • Writing covered call options for equity shares.
    • Investment in fixed income securities.
    • Securitized Debt.
    • Transaction in units through stock exchange.
    • Repo transactions in corporate debt.
    • Stock lending.
    • Segregated portfolio.
    • Investing in structured obligation & credit enhancement related securities.
    • Investment having special features 
    • Risk factors associated with REITs and InvlTs.
    • Investing in Triparty Repo / Government Securities.
    • Swap/ Forward rate agreement (FRA)/ Interest rate features (IRF).

  • Risk Control Strategies

    • Liquidity risk:- The liquidity of the LIC ABF scheme's investments may be inherently restricted by trading volumes, transfer procedures and settlement periods.
    • Interest Rate Risk:- changes in rates affect the prices of bonds. If interest rates rise, the prices of bonds fall and vice versa. As well-diversified portfolio may help to mitigate this risk.
    • Volatility Risk:- There is the risk of volatility in markets due to external factors like liquidity flows, changes in the business environment, economic policy etc. The scheme will manage volatility risk through diversification.

    How will the scheme allocate its assets?

    Equity and equity related investment:- 0 to 100. Risk profile high.

    Debt and money market instruments:- 0 to 100. Low to medium.

    Unit issued by REITs & InvITs:- 0 to 10. Medium to high.

    Derivative positions for other than hedging purposes shall not exceed 50% of total assets.

    The scheme may invest in debt derivatives to the extent 20% of the net  assets of the scheme.

    Where will the scheme invest?

    1. Equity and Equity related securities.

    2. Fixed Income Securities of the Government of India, state and local government agencies, statutory bodies, public sector undertakings, supranational financial institutions, corporate entities, and trust.

    3. Debt and Money market.

    4. The scheme may use techniques such as interest rate swaps, options on interest rates, warrants, forward rate agreement and other derivative instruments that are/ may be permitted under SEBI/RBI Regulation.

    These are the major areas where LIC Balanced Advantage Fund scheme can invest.

    Fund Managers

    1. Mr. Yogesh Patil. (MBA Finance) is manage equity portfolio of the scheme.

    2. Mr. Rahul Singh. (PGDM (MBA)- IIM) manage debt Portfolio.

    Investment Restrictions

    1. The Scheme shall not invest more than 10% of its NAV in debt instruments.

    2. Investment in unrated debt and money market instruments by the scheme shall not exceed 5% of the net assets of the scheme.

    3. Total exposure of debt scheme of mutual funds in a particular sector  shall not exceed 20% of the net assets of the scheme.

    4. Total exposure of debt schemes of mutual funds in the group shall not exceed 20% of the net assets of the scheme.

    5. The investments by debt mutual fund scheme in debt and money market instruments of group companies of both the sponsor and the asset management company shall not exceed 10% of the net assets f the scheme.

    6. The mutual fund under all its schemes taken together will not own more than 10% of any companies paid up capital carrying voting rights.
    Theses are the major restrictions.

    NFO opens on 20/10/2021 and closes on 03/11/2021.

    Minimum subscription:- 5000/- Rs. for Lump sum  Investment and 500/- for SIP.

    Exit Load: 1% before completion of 12 months, After that NIL.

    Risk Factor:-  As per SID submitted by AUM in Sebi is Very High.

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