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Balanced advantage funds for retirement planning

Balanced advantage funds
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Securing a comfortable post-retirement life demands more than relying solely on savings. With living costs on the rise, exploring diverse investment options becomes imperative. However, planning for retirement isn't a chaotic journey; it's about working towards a financially sound future after your working years. The essence lies in constructing a substantial corpus decision with effective risk management.

In this pursuit, balanced advantage funds (BAFs) can offer a relatively steady path, blending growth potential with risk management to help you build a comfortable nest egg.

  • Table of contents
  1. Understanding retirement planning
  2. Advantages of balanced advantage funds for retirement planning
  3. Considerations for retirement planning with balanced advantage funds
  4. FAQ

Understanding retirement planning

Retirement planning involves securing a reliable post-retirement income stream. It necessitates allocating funds and purposefully investing for that objective. Tailoring your retirement strategy to your ultimate goal, current income, and age is crucial. Achieving a comfortable retirement basically means having enough resources post-retirement to sustain your preferred lifestyle. This requires long-term investing and prudent risk management to ensure a steady income during your golden years.

Additionally, the selection of appropriate investments plays a pivotal role in realizing your retirement objectives. Key motivations for having a robust retirement plan include the absence of social retirement benefits, attaining financial independence, coping with inflation, and preparing for unforeseen medical emergencies.

Bajaj Finserv Asset Management Limited offers the Bajaj Finserv Balanced Advantage Fund with an aim to leverage the upside potential of equities while actively mitigating downside risks. The fund dynamically manages its portfolio by investing in equity and equity-related instruments, coupled with strategic use of debt, money market instruments, and equity derivatives. Investors consider investing in this fund due to its first-principles approach, acknowledging the influence of fundamental and behavioural factors in the equity market. The fund offers a reasonable return potential, particularly over a longer investment horizon, making it an enticing option for investors looking at retirement planning. However, there are no guarantees that the fund will meet its objectives. For a detailed scheme information, click here.

Advantages of balanced advantage funds for retirement planning

Balanced advantage funds represent a unique investment strategy, allocating funds to both equities and debt without rigid asset allocation constraints. This flexibility enables dynamic adjustments based on market fluctuations. During bullish phases, fund managers can enhance equity exposure, while mitigating risk during market declines. These funds empower investors to capitalise on upswings without risking their entire investment.

Tailored for those seeking moderate gains, balanced advantage funds are particularly suitable for investors approaching retirement with a moderate risk tolerance. This approach offers a strategic blend of growth potential and risk management for a well-rounded investment experience.

Automatic balancing: BAFs adjust their mix of stocks and bonds based on market conditions. This means they seek to reduce risk in downturns by holding more bonds and capitalise on upswings by investing more in stocks, thus optimising the return potential over time.

Smoother ride:Unlike pure equity funds, BAFs offer relatively lower volatility because of their diversified portfolio. This lends relative stability to the portfolio and prevents significant capital erosion due to market swings, thus providing a steadier path towards your goals.

Long-term growth: BAFs still offer the potential for significant capital appreciation thanks to their exposure to equities. This can potentially help your retirement corpus grow and keep pace with inflation, ensuring your purchasing power well into your retirement.

Considerations for retirement planning with balanced advantage funds

Here are some key points investors should keep in mind while considering balanced advantage funds for retirement planning:

Long-term commitment: BAFs work well for investors with at least 10 years until retirement. While they manage risk, short-term market fluctuations can still impact returns.

Know your risk tolerance:Choose a BAF that aligns with your comfort level with risk. Consider your age, existing investments, and how much market volatility you can handle.

Do your research: Compare different BAFs based on their performance history, investment strategy, fees, and fund manager's experience. Choose one that fits your risk tolerance and aligns with your retirement goals.

Seek expert advice: Consulting a financial advisor can be invaluable, especially if you're new to investing or have a complex retirement plan. They can help you choose the right BAF and ensure your investments are on track.


Balanced advantage funds have the flexibility to change their asset allocation across equity and debt based on fluctuating economic conditions. Potential investors in BAFs should consider factors like risk, return, cost, investment horizon, financial goals, and tax implications on gains before making an investment. Moreover, balanced advantage funds can be suitable for retirement planning due to their dynamic approach and risk management strategies.


What is the ideal time to start investing in balanced advantage funds for retirement?
A. The earlier, the better! Ideally, start in your 20s or 30s to give your investments more time to grow.

Are balanced advantage funds suitable for conservative investors?
A. BAFs involve less risk than pure equity funds, but still carry some risk. Consider your overall portfolio and consult an advisor for personalised advice before investing.

Can I switch between different balanced advantage funds?
A. Yes, but be aware of exit loads and potential tax implications. Talk to a financial advisor before making any changes.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
This document should not be treated as endorsement of the views/opinions or as investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice.