Dynamic asset allocation funds are a type of balanced funds or Hybrid Funds. Most of the funds in this category are invested and spread across various sectors including equity funds, real estate, stocks and bonds.
In case the market slows down in times of a recession or a bear economy, a dynamic asset allocation fund is the one recourse meant for all consumers regardless of their risk threshold. Each of these funds are managed by a professional manager who takes care to ensure that the quality of investments is not lowered.
Bearing in mind the fact that equity funds offer the highest returns, one must not forget that the associated risks are also relatively high too. In an economy which is witnessing a slump in recent months, many investors are wary of pouring in too much of their assets in just one MF. They can opt for the list of dynamic asset allocation fund to earn guaranteed returns.
Purpose of Dynamic Asset Allocation Funds
It is perhaps the best and most suited investment vessel in an uncertain market. As opposed to static allocation funds, the dynamic funding mechanism is a better option because the investments are widely spread out.
A dynamic asset allocation perspective means that whenever a competing investment vehicle is malfunctioning, the liquidity poured in is often shifted to another vessel which is performing better.
The built-in dynamic nature of these funds is their primary advantage. It is a mechanism to beat off the market slumps.
The balanced funding option is highly recommended for those who are looking for assured returns after the end of tenure. It is also a valuable asset to those who have limited funds to invest in multiple sectors. Above all, dynamic asset allocation Mutual Funds are preferred for their steady and recurring returns.
Three issues which these funds cover are –
Since most such funds are fundamentally Fund of Funds, they come with significant taxation liabilities. Ordinarily, most Mutual Funds are subject to LTCG taxes, as is dynamic asset allocation MFs. If the funds are indexed, there will be a flat rate of tax at 20%, and the purchase price will be subjected to inflation rates.
However, the capital gains are calculated only once every three years between the procurement of the fund and the taxation period. In case the fund is non-indexed, the taxation liability is slightly lower.
There are several advantages to dynamic asset allocation Mutual Funds, viz. –
|Asset Management Company|
|Axis Mutual Fund||DHFL Pramerica Mutual Fund||Principal Mutual Fund|
|Kotak Mutual Fund||Sundaram Mutual Fund||BOI Axa Mutual Fund|
|Reliance Mutual Fund||Invesco Mutual Fund||Union Mutual Fund|
|HDFC Mutual Fund||LIC Mutual Fund||Taurus Mutual Fund|
|SBI Mutual Fund||JM Financial Mutual Fund||Edelweiss Mutual Fund|
|ICICI Prudential Mutual Fund||Baroda Pioneer Mutual Fund||Essel Mutual Fund|
|Aditya Birla Sunlife Mutual Fund||Canara Robeco Mutual Fund||Mahindra Mutual Fund|
|UTI Mutual Fund||HSBC Mutual Fund||Qauntum Mutual Fund|
|Franklin Templeton Mutual Fund||IDBI Mutual Fund||PPFAS Mutual Fund|
|IDFC Mutual Fund||Indiabulls Mutual Fund||IIFL Mutual Fund|
|DSP Blackrock Mutual Fund||Motilal Oswal Mutual Fund||Escorts Mutual Fund|
|TATA Mutual Fund||BNP Paribas Mutual Fund|
|L and T Mutual Fund||Mirae Asset Mutual Fund|