How beginners can invest in balanced advantage funds: A step-by-step guide

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If you are a new investor, one of the scariest things about investing is market volatility. However, by understanding market volatility, you can ride its waves and use it to your advantage. One way of doing this is by investing in a balanced advantage fund (BAF). BAFs, also known as dynamic asset allocation funds, are hybrid funds that dynamically allocate assets between equity and debt instruments.

In other words, balanced advantage funds invest in a mix of stocks and fixed-income instruments. Moreover, these funds can change their equity-debt allocation based on the market conditions, thus mitigating risk, and optimising the return potential.

  • Table of contents
  1. Understanding the basics of investing
  2. Step-by-step balanced advantage fund investment guide for beginners
  3. Tips for successful investing in balanced advantage funds
  4. Bajaj Finserv Balanced Advantage Fund
  5. FAQ

Understanding the basics of investing

Before diving into balanced advantage funds, it's essential to understand the basics of investing, including how new investors can invest in balanced advantage funds. This includes setting financial goals, assessing risk tolerance, and creating an investment plan aligned with your objectives. Additionally, it is important to familiarise yourself with concepts such as asset allocation, diversification, and the importance of a long-term investment horizon.

Step-by-step balanced advantage fund investment guide for beginners

Research and select a fund: Begin by researching various balanced advantage funds available in the market. Consider factors such as fund performance, expense ratio, fund manager expertise, and the fund's investment approach. Choose a fund that aligns with your investment goals and risk tolerance.

Complete KYC process: To invest in mutual funds, including balanced advantage funds, complete the Know Your Customer (KYC) process with a registered KYC registration agency (KRA). Submit the necessary documents such as identity proof, address proof, and PAN card to fulfil KYC requirements.

Choose investment mode: Decide whether you want to invest in balanced advantage funds through a lumpsum investment or via a systematic investment plan (SIP). SIP allows you to invest a fixed amount regularly, promoting disciplined investing and eliminating the risk of market timing.

Open an account: If you don't already have one, open an investment account with a registered mutual fund distributor or through an online investment platform. Provide necessary details and complete account opening formalities.

Submit investment form: Fill out the investment form provided by the mutual fund distributor or online platform. Specify the amount you wish to invest, fund name, investment mode (lumpsum or SIP), and other required details.

Monitor your investment: After investing in a balanced advantage fund, regularly monitor your investment's performance. Review your portfolio periodically to ensure it remains aligned with your financial goals and risk tolerance. Consider rebalancing if necessary.

Tips for successful investing in balanced advantage funds

While the potential merits of balanced advantage funds are evident, it's important to approach any investment decision with due diligence. Here are some key factors to consider before committing your capital:

Risk tolerance and investment horizon: Assess your risk appetite and investment time horizon. This will help determine which fund to choose based on appropriate allocation between equity and debt within the fund.

Fund manager track record: Research the track record and experience of the fund manager. A seasoned manager with a consistent performance history can instil confidence in your investment choice.

Expense ratio and other costs: Evaluate the fund's expense ratio and any associated costs. Lower expenses can have a positive impact on your overall returns.

Historical performance: While past performance doesn't guarantee future results, it provides insights into how the fund has navigated different market conditions.

Bajaj Finserv Balanced Advantage Fund

The Bajaj Finserv Balanced Advantage Fund is an open-ended dynamic asset allocation fund. The investment objective of the scheme is to capitalize on the potential upside of equities while attempting to limit the downside by dynamically managing the portfolio through investment in equity & equity related instruments and active use of debt, money market instruments and derivatives.

However, there is no assurance that the investment objective of the Scheme will be achieved. This is achieved through investments in equity and equity-related instruments, along with active utilisation of debt, money market instruments, and derivatives. It's important to note that while the fund aims to achieve its investment objective, there is no assurance of its success. For a detailed scheme information, click here.


Balanced advantage funds offer beginners a suitable opportunity to invest in a dynamic asset allocation strategy that adapts to market conditions. By following a step-by-step approach, staying informed, and focusing on long-term investing, beginners can effectively invest in balanced advantage funds and work towards achieving their financial goals.


What is the minimum investment requirement for balanced advantage funds?
A: The minimum investment requirement in balanced advantage fund differs from fund to fund with some funds having an minimum investment requirement as low as Rs. 500 for both SIP and lumpsum.

Can I invest in balanced advantage funds through a systematic investment plan (SIP)?
A: Yes, most balanced advantage funds allow investors to invest through a systematic investment plan (SIP), which involves investing a fixed amount at regular intervals. SIPs promote disciplined investing and help mitigate market timing risk.

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.