Axis Mutual Fund has renamed and re-positioned its four year old Axis Dynamic Equity Fund as Balanced Advantage Fund. Axis Dynamic Equity was launched in August 2017, with the ability to invest 65-100% of its assets in equity and the balance in debt. The reclassification, which is effective 1st October, removes these limits.
The fund has garnered total assets under management (AUM) of Rs 1,458 crore since its launch.The Rs 1,458-crore balanced advantage fund will remain an open-ended dynamic asset allocation fund managing exposure actively between equity and fixed income.
A report in “The Economic Times” quoted Anupam Tiwari, equity fund manager at Axis MF who said that the fund will now have greater flexibility to invest in a particular asset class with the minimum range of 0% to a maximum range of 100% in both equity and fixed income. The fund also has the provision to invest 0-10 per cent in units issued by REITs and InvITs.
He said the asset allocation is guided by an in-house proprietary methodology that allows them to manage equity exposure in response to changes in the underlying market conditions and thus giving a better option to investors who have a longer timeframe in mind. This dynamic nature makes it an ideal investment solution for all investors as the fund not only manages to navigate market volatility better but also focuses on wealth creation over the long term, he said.
While explaining the rationale behind the move, Mr Tiwari said the inherently volatile nature of equities can sometimes lead to abnormality in prices in the near term, which influences investor behaviour and leads investors to buy at market peaks and sell at market lows, causing massive wealth destruction.
But he added that this risk and heavy loss can be mitigated if investors are given a product that has intelligent risk management built in its core. Mr Tiwari claimed that the Axis balanced advantage fund is such a product that offers a solution to this basic problem for investors. The fund has so far this year given 27% returns and 8.4% last year and 9% in the previous year.
Mr Tiwari’s comments were echoed by Axis MF managing director and CEO Chandresh Nigam who said balanced advantage funds allow investors to mitigate equity risks through a structured process that manages equity exposure dynamically. "Thus, they can help transform investing experience by allowing investors to benefit from the long-term growth potential of equity while managing its risk."