Last Updated on December 29, 2021
This is a review of Edelweiss Balanced Advantage Fund, an open-ended dynamic asset allocation fund. In its 12th year, the fund has an AUM of Rs. 1496 crores. It varies its equity exposure between direct equity and arbitrage as per market conditions but will remain an “equity fund” with respect to taxation.
Depending on market conditions, direct equity exposure can vary between 30% (rest 35% in arbitrage) to 80%. The scheme has the freedom to use quantitative models for asset allocation and security selection. As is usual for many funds, the scheme document reveals little about the equity asset allocation strategy.
The scheme presentation refers to an “Edelweiss Equity Health Index” with vague details on how it is computed with a combination of trend and fundamentals. It sometimes resembles a momentum indicator with equity investment increasing during bull phases and decreasing during bear phases. From 60-ish per cent direct equity in early 2020, it dropped by half at the bottom of the crash (later-March) and quickly shot back up to about 70% in the last couple of months (see below).
Edelweiss Absolute Return Fund became Edelweiss Dynamic Equity Advantage Fund from May 2017 and Edelweiss Balanced Advantage Fund from June 2018 with a similar investment strategy over the years. The asset allocation history is shown below.
The fund typically does not tactically vary equity and debt levels as much as it varies direct equity and arbitrage levels. This is a screenshot of the net equity (direct equity) exposure from the scheme presentation.
Edelweiss Balanced Advantage Fund vs Nifty 50 TRI
Since Jan 2013, the fund (direct plan) has fared well with respect to Nifty 50. The fund’s primary benchmark is CRISIL Hybrid 50+50 Moderate Index.
The lower drawdown of the fund is apparent from the above as well the three-year rolling returns shown below. Notice the significantly lower spread between max and min return over the period studied.
Who should invest in Edelweiss Balanced Advantage Fund? This fund would naturally underperform Nifty 50 during bull phases and outperform in bear phases. Although little is known about the tactical asset allocation model, it has fared reasonably well so far. The fund is suited for mature investors with a long-time horizon. The risk associated with active management is a concern but is true for all category peers. The higher equity exposure makes the fund relatively more volatile than some of its peers and should not be taken lightly. A TER of 0.6% is reasonably inviting.
Use our Robo-advisory Excel Tool for a start-to-finish financial plan! ⇐ More than 1000 investors and advisors use this!
- Follow us on Google News.
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Join our YouTube Community and explore more than 1000 videos!
- Have a question? Subscribe to our newsletter with this form.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Explore the site! Search among our 2000+ articles for information and insight!
About The Author
Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over nine years of experience publishing news analysis, research and financial product development. Connect with him via Twitter or Linkedin or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation for promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts you and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu gets a superpower!” is now available!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or you buy the new Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low volatility stock screeners.
About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our Youtube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.Your Ultimate Guide to Travel
This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)