Mutual Fund News : SBI Mutual Fund Launches SBI Balanced Advantage Fund

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SBI Mutual Fund has launched a new open ended dynamic asset allocation fund - SBI Balanced Advantage Fund.

The investment objective of the scheme is to provide long term capital appreciation / income from a dynamic mix of equity and debt investments. However, there can be no assurance that the investment objective of the Scheme will be realized.

Under normal circumstances, 0% to 100% of the funds portfolio will be invested in Equity & Equity related instruments. It can invest 0% to 100% of its assets in Debt securities (including securitized debt) and money market instruments (including TRIPARTY REPO, Reverse Repo and equivalent). It may also invest upto 10% of its assets in Units issued by REITs and InvITs.

SBI Balanced Advantage Fund will invest in Equity and Equity related instruments, Debt securities (including securitized debt) and money market instruments, Units issued by REITs and InvITs, Derivatives, foreign securities including ADR/GDR/Foreign equity and overseas ETFs, Repo in Corporate Debt, securities lending, Mutual Fund units including ETFs, Credit Enhancement / structured obligations such as corporate / promoter guarantee.

Money Market instruments includes Commercial Paper, Commercial Bills, Certificates of Deposit, Treasury Bills, Bills Rediscounting, Triparty Repo, Government securities having an unexpired maturity of less than 1 year, alternate to Call or notice money, Usance Bills and any other such short-term instruments as may be allowed under the Regulations prevailing from time to time.

As per the scheme’s SID, SBI Balanced Advantage Fund endeavours to provide long term capital appreciation/income from a mix of equity and debt investments.

The scheme may also invest in Government securities, money market instruments, securitised debt, corporate debentures and bonds, quasi-Government bonds or any other debt instruments, equity and equity related instruments etc. as permitted by regulations.

Different asset classes exhibit different risk-return profile and relatively low correlation to each other as compared to investments within the same asset class.

The fund manager will determine asset allocation between equity and debt depending on prevailing market and economic conditions. The debt-equity mix at any point of time will be a function of various factors such as equity valuations, interest rates, view on the asset classes and risk management etc.

Equity: SBI Balanced Advantage Fund will invest in a well-diversified portfolio of equity & equity related instruments. The fund manager while selecting stocks will focus on the fundamentals of the business, the quality of management, the financial strength of the company, market leadership etc. The scheme will invest across sectors without any market cap or sectoral bias.

Debt: SBI Balanced Advantage Fund will invest in a diversified range of debt and money market instruments. The fund manager will allocate the assets of the scheme taking into consideration the prevailing interest rate scenario, yield curve, yield spread & the liquidity of the different instruments. The portfolio duration and credit exposures will be based on a thorough research of the general macroeconomic condition, political and fiscal environment, inflationary expectations & other economic considerations. The Scheme may also invest a part of its corpus in overseas equity, bonds and mutual funds and such other instruments as may be allowed under the Regulations from time to time.

The Scheme may engage in Stock Lending activities. It may also invest in derivatives such as Futures & Options and such other derivative instruments like Stock/ Index Futures, Interest Rate Swaps, Forward Rate Agreements or such other derivative instruments as may be introduced and permitted by SEBI from time to time. The Scheme may invest in derivative for the purpose of hedging, portfolio balancing and other purposes as may be permitted under the Regulations. Hedging using Interest Rate Futures could be perfect or imperfect, subject to applicable regulations.

SBI Balanced Advantage Fund’s performance will be benchmarked against CRISIL Hybrid 50+50 Moderate Index TRI.

The fund will be managed by Mr Gaurav Mehta (Equity), Mr Dinesh Balachandran (Equity), Mr Dinesh Ahuja (Debt), and Mr Mohit Jain (Overseas).

The NFO opens for subscription on August 12, 2021, and closes on August 25, 2021. The scheme will reopen for continuous Sale and Repurchase within 5 business days from the date of allotment.

The fund’s NAV is priced at Rs 10/- per unit during the NFO period. The minimum subscription amount is Rs 5,000 and in multiples of Re 1 thereafter.

The fund offers Regular Plan and Direct Plan having Growth Option and Income Distribution Cum Capital Withdrawal option (Payout and Reinvestment facility).