SBI Balanced Advantage Fund

Fund of the Month: SBI Balanced Advantage Fund

Fund Manager: Dinesh Balachandran, Mansi Sajeja, Pradeep Kesavan, Rajiv Radhakrishnan

SEBI Categorisation: Dynamic Asset Allocation or Balanced Advantage

Type & Investment Objective

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. The scheme 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. The Scheme 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.

Fund Commentary

Outlook

• As per the AMC, the US economy is likely to slow over the next six months. However, the base case picture is that growth will remain modestly positive, with the US avoiding a recession.
• Macro factors place a certain downside risk to corporate profits in the equity market which is already struggling with high valuation. Fundamentals dictate a caution on the market while liquidity and surge in flow makes it difficult to predict when the equity rally stops. Global rate dynamics and India changing fiscal expenditure, equity allocation should see a sector rotation.
• AMC stays constructive on discretionary consumption as a secular theme given the disproportionate boost the category derives from rising incomes. A related category that should benefit from rising incomes is savings plays and investment products. A third theme that AMC is positive on is natural resources and physical assets which, after more than a decade of underperformance, should benefit from a fiscally expansionary global policy backdrop that supports higher growth as well as inflation.
• AMC continues to stay bottom-up on stock selection with a leaning towards quality. AMC remains of the view that increasingly the market will become more discerning and move back towards companies which have strong business models and long-term earnings growth visibility.
• The fund has 31.42% exposure to Equity, 34.70% Arbitrage and 33.88% Debt/Other.

Sectoral Overweights

Financials: As valuations are now cheap across lenders and more clarity on NPA issues

Sectoral Underweights

Consumers: Expensive valuations even as growth is likely to slow down going forward.

This fund is recommended for investors with an investment horizon of 2-3 years, in line with investors’ individual risk profile and product suitability.

Top Holdings                                                                                                                                                    (As on 30 September 2024)

Returns (%)                                                                                                                                                  (As on 30 September 2024)

Absolute for <= 1 year and compounded annualized for > 1 year

Scheme Features

• Options: Growth and Income Distribution cum capital withdrawal (IDCW)
• Minimum Investment amount: Rs. 5000
• Load Structure Exit Load: "If redeemed bet. 0 Year to 1 Year;  Exit Load is 1%;
• Benchmark Index: Nifty 50 Hybrid composite debt 50:50 Index*                           
• Sep 2024 [Fund Size in Crs]: 32,940.95    
• NAV: 52 Week High / Low: Rs : 15.05 / 11.9

Product Label

This product 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​​​​​​​

Investments in diversified and actively managed portfolio of equity

Source for entire data stated above is ICRA Analytics Ltd. (For Disclaimer of ICRA Analytics Ltd, refer https://icraanalytics.com/home/disclaimer)

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