• Chetan Jain

Dynamic Asset Allocation Funds

Mutual Funds are an ideal investment solution because they offer you schemes that are dynamic in nature. That means the portfolios are managed by professional fund managers who make changes between asset classes and re-balance according to how the market plays out. These professionals are backed by experienced research teams and a lot of intensive Research and studies happen before a decision is made.

With Dynamic Asset Allocation, the Fund manager plays a prominent role in choosing between Asset Classes. From history, it is found that performance of asset classes varies year on year. They go through cycles and hence the Fund managers through their knowledge and experience allocate investments in different asset classes like Equity, Debt, Gold, and Real Estate.

Every Investor faces difficulties in deciding the allocation to various asset classes, especially equities

Should one increase the allocation when equities are rising? OR

Should one switch to debt when equities fall?

Only when emotions drive investments, one can be sure of missing out on the best days. On the other hand, no investor wants to lose out due to volatile markets. So the big question is how to benefit from the growth potential of equities and yet maintain significantly lower volatility at the same time.

Below is the one of the Dynamic Equity Mutual Fund scheme example wherein Fund manager has successfully manage the Asset allocation during the Market correction due to Pandemic in March 2020 by increasing the Equity exposure and later he started booking profits for his investors by reducing Equity exposure once market started recovering today the Fund is sitting less than 40% in Equity allocation.

Dynamic Asset Allocation / Balance Funds Performance as on 29th Sept 2021

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