Aditya Birla Sun Life Balanced Advantage Fund

Let us start with a simple plain FACT. Twenty-one years ago, if you had started a monthly SIP of ₹10,000, then it could have grown to over ₹1 crore today. Isn’t it amazing? So if you are looking forward to such investment option in India that enable wealth creation with systematic investment in a timely manner in a mutual fund, here is an investment scheme worth considering – Aditya Birla Sun Life Balanced Advantage Fund. 

But what is the Aditya Birla Sun Life Balanced Advantage Fund and why investors should invest in it? 

As one of the oldest equity funds in the Asset Management Company (AMC) and also one of its large equity schemes, Aditya Birla Sun Life Balanced Advantage Fund came into play in 2000 with an objective of offering stable returns by establishing a balance between equity investment and fixed income securities, on the basis of market valuation.

Now, it is time to deep-dive into the review to determine more facets of Aditya Birla Sun Life Balanced Advantage Fund.

Aditya Birla Balanced Advantage Fund Review 

Let’s start with the background of Aditya Birla Sun Life Balanced Advantage Fund. This fund is a scheme of Aditya Birla Sun Life Mutual fund, a joint venture of Aditya Birla Capital, a well-known conglomerate, and Sun Life AMC Investments, Inc, a Canada-based leading financial services company.

The rich legacy of wealth creation and sound management can be seen in both the parent companies.  

As already known to people, Aditya Birla Group is an eminent brand and a well-known name in the Indian financial markets. Aditya Birla Capital is its financial services wing. Sun Life is known for its expertise in investment management and is also a considerable life insurance provider worldwide.

Aditya Birla Sun Life Balanced Advantage Fund strikes a balance between growth and safety by investing in a combination of equity and debt instruments, no matter if the share market is up or down.

Furthermore, it uses the valuation based on the P/E model as a balancing tool to manage the volatility across the market cycles.

The dynamic asset allocation approach of the fund enables the active portfolio rebalancing. While it seeks to maintain a minimum gross equity exposure of over 65%, the fund changes the equity allocation dynamically depending on the market cycle.

With a buy low sell high strategy, it offers the scope for capital appreciation and reduces the downside risk by taking the exposure to instruments through portfolio hedging. For e.g. In April and May 2020 when the markets corrected significantly the fund model moved to 75%-80% in equity taking advantage of the price correction.

The markets rallied from there on and the strategy paid off. 

If you’re curious about the suitability of this scheme, then it is time to level up your knowledge.

So what kind of investors can consider Aditya Birla Sun Life Balanced Advantage Fund? Well, it will depend basically on one’s objective of investment, which could be:

• First-time investors with an investment horizon of 3 years and above 
• Investors looking for an aggressive alternate to fixed income funds
• Investors seeking regular cash flows 
• Conservative investors looking to capitalize on equity’s growth potential while minimizing the downside  
• Investors seeking to invest in the diversified funds while leaving the asset allocation to experts

The fund uses a blend of both top-down and bottom-up investment approach to select stocks across different caps with a reasonable margin of safety. It broadly maintains large cap bias while taking opportunistic exposure in midcaps. The portfolio is sector agnostic and while it is diversified the focus is on quality.

The all-season scheme provides the following to the investors:

• Growth Potential
• Lower Volatility
• Tax Efficiency

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Aditya Birla Balanced Advantage Fund Plan

Once you log in you can access different Value Added Products of the mutual fund:

Systematic Investment Plan (SIP)

To resolve the sporadic market volatility and allow long-term saving, an SIP is a good way of investing and it is accessible in both ways, i.e., Online and Offline.

Some of the prominent features of SIP are:

• Set-up SIP: The facility helps to enhance the SIP amount of the investors in regular intervals. 

By raising the contributions around the schemes that are functioning well, also enables making the best from the SIP investments.

When you get a pay rise, it is easier to enhance the investment amount.

• Multi Scheme SIP Facility: Using a single application form and payment instruction, this facility allows investors to invest in different schemes with one form application. The multi SIP facility is also a good way to diversify one’s investments across multiple products for different financial goals.

Systematic Transfer Plan (STP)

The STP helps investors shift a fixed amount from one scheme to another by investing. 

Systematic Withdrawal Plan (SWP)

SWP enables the investors to extract a fixed amount from the mutual fund. In addition, the investor gets the option of:

• Appreciation Withdrawal: It allows the investors of the Growth Plan to extract the appreciation amount at regular intervals. Moreover, an investor can extract ₹1,000 or above at regular intervals.
• Fixed Withdrawal: It also allows the investors of the Growth Plan to extract a fixed amount at regular intervals where the investors can take out ₹1,000 or above at regular intervals.

Smart Withdrawal Facility (SWF)

To receive income at 8% per annum on fixed intervals or equal to the dividend payment, SWF offers the fixed option for payment and the variable payment option. It helps in building cash flows and tax efficiency. Further, there are no TDS and exit load impacts.

• Capital Appreciation Transfer Plan (CATP)

At regular intervals, CATP enables the investors to maintain the capital as well as transfer the capital appreciation to other asset classes or schemes.

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Aditya Birla Sun Life Balanced Advantage Fund Portfolio 

It is essential to know about the Aditya Birla Sun Life Balanced Advantage Fund’s Portfolio. 

Here comes the current portfolio positioning and insights of Aditya Birla Sun Life Balanced Advantage Fund.

• On the basis of the adjusted trailing P/E ratio of the S&P BSE 100 index as well as other ratios including P/B, Dividend Yield, and so on, the net equity allocation is calculated. Net equity exposure of ABSL BAF was ~37.70% in Jul 2021
• If checked currently, it can be seen that the portfolio is overweight in the sectors like Metals, Transportation, Telecom, Pharma, Construction, Media & Ent.
• Top Contributors in July were ICICI Bank, Sun Pharma, CAMS, Bharti Airtel, Hindalco, Bajaj Finserv, and Gland Pharma. On the fixed-income side, we are running an accrual strategy with YTM of 4.20% and MOD of 1.12 at the end of the month.

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Aditya Birla Sun Life Balanced Advantage Fund Performance

Before investing, if you want to know the Aditya Birla Sun Life Balanced Advantage Fund Performance, then it is important to check its performance annually, quarterly, monthly, and weekly.

Hence, now, let’s shed some light on the same by considering Aditya Birla Sun Life Balanced Advantage Fund performance one after another. The performance is also mentioned in the following table.

 

Above is the performance analysis of Aditya Birla Sun Life Mutual Fund, but when doing peer comparison with other mutual fund investment platforms, again it offers the maximum benefits to the investors. From its inception, ABSL Balanced Advantage Fund has given returns of 9.41% it clocked in 31.85 % returns in 1 year. 

Check out the performance details of Aditya Birla Balanced Advantage Mutual Fund in comparison to its peers:

Source: Value Research Online

 

So, if you are looking for a mutual fund scheme with reasonably good and stable returns then choosing Aditya Birla Sun Life Balanced Advantage Fund can prove to be beneficial.

After discussing the performance let’s have a look at the current portfolio positioning of the mutual fund scheme and its sectoral breakout. 

No doubt the scheme helps you to build up your portfolio by offering you the option to diversify your investment in equity stocks categorized under different market cap and sectors. 

As per the data, the following is the sector and equity holding breakout of the Aditya Birla Sun Life Balanced Advantage Fund.

The mutual fund scheme gives you the opportunity to manage and diversify your investment by providing you the option to invest in different sectors. Here’s a glimpse of some of the sector allocation the fund has made:

Source: Morningstar

 

Other than the sectors here are the top 10 equity holdings covered under the mutual fund scheme.

Source: Morningstar

 

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Why invest in Aditya Birla Sun Life Balanced Advantage Fund? 

Here are some of the top reasons that can influence you to plan your investment in this mutual fund scheme. 

1. One can generate a regular flow of income with the Aditya Birla Sun Life Balanced Advantage Fund by using its seamless Smart Withdrawal Facility.
2. The interest rates are seen at a lower level in decades, and further, it is expected to be at a lower level around the medium term.
3. The ample number of global liquidity is linked with weak but improving macros result in the persisted volatility. 
4. Along with the valuation being expensive, the timing in the equity market is getting difficult in the continuing development scenarios. 
5. The one that improves the return potential is the actively managed portfolio. The fund participants are involved in the growth stocks and, at the same time, bound the low yield stock investments.

Still, thinking about how to invest in the Aditya Birla Sun Life Balanced Advantage Fund? Well, for investment, the big firm offers five various procedures. 

• As a first option, you can invest online.
• Other than that, you can take the help of an Advisor.
• As another option, you can call customer support.
• You can fill the application form yourself and then can send it to the local branch.
• As the last option, you can personally visit the Aditya Birla office. 

In all, the Aditya Birla Sun Life Balanced Advantage Fund selects the dynamic approach for asset allocation that considers the ups and downs of a market cycle.

It generally targets to purchase the undervalued opportunities and sell-off on the overvalued situation and somewhere offers support to the investors looking for the gains in the long run.

With the extensively tested P/E-based model, the Aditya Birla Sun Life Balanced Advantage Fund derives the Net Equity Exposure.

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