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    5 Reasons Why SBI BAF

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    Rajdip Hazra
    1) SBI Balanced Advantage Fund offers dynamic allocation across asset classes from 0-100% in equities, fixed income, and REITs/InvITs to maximize risk-adjusted returns. 2) The fund provides diversification through components like long-term equities, arbitrage strategies, and fixed income to balance risk and returns. 3) It aims to provide tax efficiency through maintaining at least 65% exposure to equities to qualify for more favorable long-term capital gains tax treatment.

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    5 Reasons Why SBI BAF

    Uploaded by

    Rajdip Hazra
    47 views3 pages
    1) SBI Balanced Advantage Fund offers dynamic allocation across asset classes from 0-100% in equities, fixed income, and REITs/InvITs to maximize risk-adjusted returns. 2) The fund provides diversification through components like long-term equities, arbitrage strategies, and fixed income to balance risk and returns. 3) It aims to provide tax efficiency through maintaining at least 65% exposure to equities to qualify for more favorable long-term capital gains tax treatment.

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    1) SBI Balanced Advantage Fund offers dynamic allocation across asset classes from 0-100% in equities, fixed income, and REITs/InvITs to maximize risk-adjusted returns. 2) The fund provides diversification through components like long-term equities, arbitrage strategies, and fixed income to balance risk and returns. 3) It aims to provide tax efficiency through maintaining at least 65% exposure to equities to qualify for more favorable long-term capital gains tax treatment.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    47 views3 pages

    5 Reasons Why SBI BAF

    Uploaded by

    Rajdip Hazra
    1) SBI Balanced Advantage Fund offers dynamic allocation across asset classes from 0-100% in equities, fixed income, and REITs/InvITs to maximize risk-adjusted returns. 2) The fund provides diversification through components like long-term equities, arbitrage strategies, and fixed income to balance risk and returns. 3) It aims to provide tax efficiency through maintaining at least 65% exposure to equities to qualify for more favorable long-term capital gains tax treatment.

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    © All Rights Reserved
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    of 3

    REASONS

    WHY…
    SBI BALANCED ADVANTAGE FUND

    # 1 Dynamic Allocation Edge

    SBI Balanced Advantage Fund offers the flexibility to invest across asset classes dynamically. Basis
    several parameters, the fund manager will have complete flexibility to manoeuvre assets in the
    range of 0 – 100% across asset classes. This will help the Fund Managers in arriving at the optimal
    mix of assets with the aim of achieving risk-adjusted returns
    Scheme Structure to derive multiple benefits to the investor –

    Particulars % Allocation Range

    Equity & Equity related instruments 0% - 100%


    Fixed Income 0% - 100%
    Units issued by REITs & InvITs 0% - 10%

    Please Note: The portfolio of the scheme is subject to changes within the provisions of the Scheme Information document
    of the Scheme. The asset allocation and investment strategy will be as per the Scheme Information Document. For detailed
    asset allocation and investment strategy, please refer Scheme Information Document

    # 2 Diversification to provide better risk-adjusted returns

    Diversification across asset classes to balance the risk and reward:


    The Equity portion comprises of two components - long equity to generate higher alpha & arbi-
    trage portion to provide a hedge against volatile market.
    Fixed Income & equivalent instruments in the portfolio help provide portfolio stability, mitigate
    downside risk and provide modest returns.
    # 3 Tax Efficiency

    The fund will endeavour to provide an equity taxation if gross equity exposure is having 65% and
    above* thus reducing tax burden on an investor coupled with better post tax returns. Please refer
    to SID for details disclosure of taxation.

    # 4 Robust Portfolio Construction process

    For constructing the portfolio, the fund will endeavour to follow a three-tiered approach to achieve its
    strategy.
    Tier I would be to determine the asset mix of the portfolio and hence deciding the Equity & Debt
    allocation. Asset allocation at any given point of time will be decided by the Fund Managers, using
    parameters such as Sentiment Indicator, Valuations & Earnings Drivers.
    Tier II would be to determine the style skewness. Factors like allocation to different market cap
    (large/ mid/ small), sector preference and value/growth preference, would be decided in this step.
    Basis the above two, Tier III would be the stock/ security selection. Stock/ Security selection would
    be based on the highest conviction ideas of Fund Managers & Analysts. On the fixed income side,
    the aim to have high credit/ sovereign portfolio to maintain liquidity in the fund and seek to gener-
    ate alpha by duration management across the yield curve.

    # 5 Regular income through SWP (A) facility

    Pre-defined withdrawal: SWP(A) facility will facilitate investors to withdraw a fixed percentage, or
    any other amount as specified by an investor basis one’s requirement to meet regular cashflows.
    Fixed Payouts: The facility has an option available to investors to withdraw specific % of cost of
    investment, thus ensuring fixed payouts till the enrolment period expires or the unit balance in the
    folio is greater than the withdrawal amount as specified by an investor, whichever is earlier.
    Tax Efficiency: The facility is a more tax efficient as the capital gains realised on the units withdrawn
    from an equity-oriented scheme after 1 year from the date of allotment will attract long term
    capital gains of 10% unlike other regular payout options like dividends, interest etc. which are taxed
    in the hands of investor at the applicable tax slab. Please also refer to tax efficiency section in point
    no. 3.
    Flexibility of Withdrawal: The investor has the flexibility to choose frequency & amount as per the
    terms of the facility and also has an option to discontinue the facility at his discretion with prior
    intimation.

    *Though it is a dynamic asset allocation scheme, the endeavour will be to keep atleast 65% of the total proceeds of the fund in domestic
    equity & equity related instruments (based on annual average of the monthly averages of opening and closing figures) to attract equity
    taxation benefits as per prevailing tax laws.
    SBI Balanced Advantage Fund is suitable for investors who are seeking^:

    Long term capital appreciation.


    Dynamic Asset allocation between equity and equity related Instruments including derivatives
    and fixed income instruments.
    Investors understand that their principal
    will be at Moderately High risk ^Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

    Disclaimer
    This note is for information purposes only and is not an offer to sell or a solicitation to buy any mutual
    fund units/securities. The views expressed herein are based on internal data, publicly available
    information & other sources believed to be reliable. These views alone are not enough and should
    not be used for the development or implementation of an investment strategy. It should not be
    construed as investment advice to any party. All opinions and estimates included here constitute our
    view as of this date and are subject to change without notice. Neither SBI Funds Management Private
    Limited, SBI Mutual Fund nor any person connected with it, accepts any liability arising from the use
    of this information. The recipient of this material should rely on their investigations and take their
    own professional advice.

    Mutual Fund investments are subject to market risks, read all scheme related
    documents carefully.

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