HDFC Balanced Advantage Fund The Smart Investors’ Choice

Investing plays an important role in wealth accumulation. If investing is viewed as a journey, then asset allocation is its guiding star. When executed effectively, it allows investor’s capital to outpace inflation. However, in today’s unpredictable and uncertain world, managing one’s asset allocation mix dynamically in a tax efficient way can be challenging.

HDFC Mutual Fund addresses this challenge through its bouquet of hybrid funds designed to simplify the process for investors. Of the various time-tested hybrid funds, HDFC Balanced Advantage Fund (“The Fund”) is one such fund which may help to answer your investment worries.

Why you should invest in HDFC Balanced Advantage Fund?

> Dual Objectives:

Achieve capital growth through equity investments and stability through debt investments.

> Equities for Long term Wealth:

Equities have the potential to create long-term wealth and outperform inflation over long term.

> Reduced Volatility:

The fund exhibits comparatively lower volatility than equity funds, courtesy of its debt component.

> Dynamic Asset Allocation:

Aims to create wealth through dynamic allocation between equity and debt based on valuations, macro scenarios, and bottom-up investment assessments.

> Tax Efficiency@

Benefits of equity taxation and tax-efficient cashflows through the Systematic Withdrawal Advantage Plan (SWAP).

@As per prevailing provisions of the Income Tax Act, 1961. In view of individual nature of tax consequences, each unit holder is advised to consult their own professional tax advisors

What is the recipe for Wealth Creation?

The recipe for wealth creation is Sound Investment combined with Time and Patience. This is demonstrated by the fact that the Fund has delivered more than 10% CAGR over 10-year period in 96% instances (as indicated in table below) since its inception.

Scheme Inception Date :February 1, 1994. Data as on December 29, 2023. Returns are calculated on a daily rolling return across various time period.

All Distributions declared prior to the splitting of the Scheme into IDCW & Growth Options are assumed to be reinvested in the units of the Scheme at the then prevailing NAV (ex-distribution NAV). Past performance may or may not be sustained in future and is not a guarantee of any future returns. Load is not taken into consideration for computation of performance. HDFC Mutual Fund/AMC is not guaranteeing/offering/communicating any indicative yields or guaranteed returns on investments made in the scheme. For complete performance in SEBI prescribed format, please refer page no. 5

The key takeaway from the above table is that,

• as holding period increases, return profile improves

• equities are a long-term asset class and that risk reduces as holding period increases

For whom is the Fund is suitable?

The Fund is suitable for investors who are looking:

to maintain their asset allocation in a convenient and tax efficient@ manner
for a well-diversified portfolio between equity and debt
at an investment horizon of over 3 years

@As per prevailing provisions of the Income Tax Act, 1961. In view of individual nature of tax consequences, each unit holder is advised to consult their own professional tax advisors

In summary, HDFC Balanced Advantage Fund offers investors a potential avenue to attain their financial objectives with comparatively lower risk compared to equity funds. This fund can be characterized as all-weather investment due to its dynamic asset allocation strategies implemented by the fund managers.

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