Balanced Advantage Fund (2) 22

MAULANA ABUL KALAM AZAD UNIVERSITY OF TECHNOLOGY
SUMMER PROJECT REPORT ON

BALANCED ADVANTAGE FUND : INVESTING
OR BRANDING STARATEGY
By
Saibal Maity
MAKAUT ROLL NO- 13600921064
OF 2021-2023
ARMY INSTITUTE OF MANAGEMENT ,KOLKATA
Page 1 of 55
GUIDANCE-cum-COMPLETION CERTIFICATE
This is to certify that Mr Saibal Maity, MAKAUT Regn. No 211360700910083of 2021-2023,
MAKAUT Roll No 13600921064, has undertaken the project titled “Balanced Advanatge Fund:
Investing or Branding Strategy ” under our guidance from 1stjuly 2022 to 31st A u g u s t 2022 at
ICICI Prudential AMC and has completed the said project successfully.
Signature:
Place: Kolkata Name:
Date: Name of the College:
Army Institute of Management
,Kolkata
Page 2 of 55
STUDENT'S DECLARATION
I hereby declare that this Project Report entitled “Balanced Advanatge Fund: Investing or Branding
Strategy”, submitted by me to the Army Institute of ManagementKolkata, is a bonafide work
undertaken by me under the guidance of Mr Amit Acharjee-Channel Manager- Retail Bank &
ND/RD,ICICI Prudential AMC and Prof. Asmita Basu, faculty of AIMK and it is not submitted to any
other University or Institution for the award of any degree or diploma/certificate or published any time
before.
Signature:
Place: Kolkata Name: Saibal Maity
Date: Address:
Page 3 of 55
ACKNOWLEDGEMENT
I express my sincere gratitude to every individual who has been instrumental in the
successful preparation of this project report.
I am highly grateful to ICICI Prudential AMC and Army Institute of Management for
giving us an opportunity to do this project.
My sincere thanks to my supervisor, Amit Acharjee and Prof Asmita Basu for
extending their co-operation, guidance and regular encouragement during my project.
I am extremely grateful to my parents, the respondents, friends and all others who
have directly and indirectly helped me in my project.
NAME: SAIBAL MAITY
Page 4 of 55
Contents
Sl. No. Topics Page
no.
1 CHAPTER 1: INTRODUCTION
1.1 Background of the Study
1.2 Objectives of the Study
1.3 Research Methodology
1.4 Limitations of the Study
1.5 Plan of chapters
2 CHAPTER 2: CONCEPTUAL FRAMEWORK

2.1 NATIONAL SCENARIO
2.1.1 History of Mutual Fund In India
2.1.2 Indian Mutual Industry’s AAUM
2.1.3 How Balanced Advantage Fund work?
2.1.4Advantages of Balanced Advantage Fund
2.1.5 Five Different Balanced Advantage Fund
2.2 INTERATIONAL SCENARIO
2.2.1 Few online payment gateways global aggregators
2.2.2The Essential Components of a Reliable Payment Gateway
2.2.3 Current and future growth expectation of global online

payment gateway
Page 5 of 55
3 CHAPTER 3: CASE STUDY
3.1 Case study 1: SBI Balanced Advantage Fund
3.2 Case study 2: HDFC Balanced Advantage Fund
3.3 Case study 3: NIPPON Balanced Advantage Fund
3.4 Sample Data from questionnaire
4 CHAPTER 4: SUGGESTION & RECOMMENDATIONS

4.2 Suggestion & recommendation
4.3 Bibliography / References
4.4 Questionnaire
Page 6 of 55
Background
1.1
Objectives of the Study

1.2
Research Methodology
1.3
Limitations of the Study
1.4
• Plan of chapters
1.5
Page 7 of 55
CHAPTER 1: INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Meaning: Balanced Advantage Fund is type of Hybrid fund that invest your money in equity
shares and bond though their proportion are not fixed. The fund Management team may
decrease the allocation to equity share depending upon the market conditions . Balanced
Advantage Fund are equity Mutual Fund Scheme with a dynamic asset allocation strategy
depending on the equity valuation, such fund can increase exposure to 80 % in stock while the
minimum threshold to stock exposure is 30%. The rest in invested in debt securities with an
inbuilt rebalancing strategy, Balanced Advantage Fund sell stock in the portfolio when
valuation are high and do the opposite when market crack, such a quick effective, and
conservative Investment Strategy help the investor handle the market volatility quite
comfortably.
Thus ,Investor get the optimum benefit of both assets-Classes-debt and equity. The
scheme seek to provide capital appreciation and income distribution to the investor by using
equity derivative strategies, arbitrage opportunities and pure equity investment . A mutual fund
that buys a combination of common stock, preferred stock, bonds, and short-term bonds, to
provide both income and capital appreciation while avoiding excessive risk.
The purpose of balanced funds (also sometimes called hybrid funds) is to provide
investors with a single mutual fund that combines both growth and income objectives, by
investing in both stocks (for growth) and bonds (for income). Such diversified holdings ensure
that these funds will manage downturns in the stock market without too much of a loss
BALANCED ADVANTAGE FUND MODEL
Asset Management Companies have their in-house mathematical models which decides equity and debt
allocations depending on market conditions. Generally, these models are created based on the fund
manager’s hypothesis of asset allocation at different valuation levels which can generate superior returns
for investors over a long investment horizon. Fund managers duly back-test these models using historical
data to see if the funds’ investment objectives can be met.
• Counter-cyclical model: This model increases equity allocation by reducing debt allocation in
falling markets and reduce equity allocations in rising markets. These models endeavours to buy low and
Page 8 of 55
sell high. However, different fund managers may use different valuation metrics for dynamic asset
allocation e.g. P/E, P/B etc.
• Pro-cyclical model: Pro-cyclical models essentially try to follow the market trend and thus
increase equity allocation in rising markets while reduce it in falling markets. Pro-cyclical models are
based on market trend indicator like daily moving averages and indicators of the trend strength / health
(Standard Deviation, Downside Deviation etc.). Some pro-cyclical models may use other factors like
valuations, macro-economic factors etc
How derivatives is used in Balanced Advantage Funds?
• Derivatives are used to manage active equity exposure through hedging which helps the fund managers
to keep gross equity exposure above 65% so that investors can avail equity taxation. This is done while
keeping in mind the asset allocation determined by the model.
• The other reason for using derivatives is to generate returns for investors through arbitrage opportunities.
As you may know, Arbitrage are risk free profits made by the scheme by exploiting price differences
between the spot (cash) and the derivatives (Futures and Options) segments of the market.
Page 9 of 55
Page 10 of 55
1.2 OBJECTIVES OF THE STUDY
A research objective is a clear, concise, declarative statement, which provides

direction to investigate the variables under the study.
The main objectives of the study are listed below:
❖ To provide an overview of the Balanced Advantage Fund
❖ To provide Indian scenario in respect of Balanced Advantage Fund

❖ To provide study on different fund houses Balanced Advantage Fund like ICICI
Prudential Balanced Advantage Fund, HDFC Balanced Advantage Fund, SBI
Balanced Advantage Fund
❖ To understand costumer attitude towards ICICI Balanced Advantage Fund
❖ To provide a transparent scenario on Working of Balanced Advantage Fund
Page 11 of 55
1.3 RESEARCH METHODOLOGY
This studied have been carried out on ICICI Balanced Advantage Fund . Data used in
this study collected basically from the secondary sources. Primary data also collected through
personal interview method conducting the person who is supposed to have knowledge about
the topic. Secondary data have been collected from various sources including websites,
newspapers, various published and unpublished article about Balanced Advantage Fund, etc.
TARGET RESPONDENTS
Population: The population consists of all Distributor (IFAs as well as Banking Channel) of
the Balanced Advantage Fund
Sample of 15 IFAs as well as persons related to Mutual Fund have been chosen for
Carrying out the study.
Sampling Method: Convenience sampling
Type of data: Primary data has been used up for the Study.
Survey Instrument: Questionnaire sent to the person concerned with request to answer the
questions and return the questionnaire.
The questionnaire is sent to respondent who expected to read and understand the
question and write down the reply in the space meant for the purpose in questionnaire itself.
A questionnaire consists of a number of questions printed or typed in a definite order
on a form or set of forms. The respondent has to answer the questions on their own.
Objective type questions have been designed in survey .Some responses have been
collected from people.
Secondary Data : collected from site,research papers and data given by company
Period of the Study:

The primary data for this study has been collected through survey during the period
from 1st July, 2022 to 31st August, 2022
Data Analysis
The data collected were analyzed for the entire sample.
Page 12 of 55
1.4 LIMITATION OF THE STUDY
The limitations of the study of Balanced Advantage Fund: Branding or Investment strategy are
as follows:
• The research study is limited to the geographical boundaries of Kolkata
• The study undertaken is sufficiently broad in outlook and wider in coverage asregards
the subject matter. All necessary care has been taken to reduce any kind of bias at all
bench.
• Only 15 respondents were included in the study, so it may affect the accuracy of result.
• Collect majority of data from secondary sources like website of their own. Cross
verification of the data is not possible from my ends.
• Respondents may not have expressed their strong feelings, Therefore collection of data
was a tedious process
• Since the study was on Balanced Advantage , data are collected from the various
websites. Authenticity of those data is the major drawbacks.
• Selecting only those respondents who are IFAs and Banker

• All findings are based on the information provided by the respondents and are subject
to the potential bias and prejudice of the people involved.
• Insufficient secondary data is one of the limitations of my study, because previous
researcher sells their study on Balanced Adv. Those are not easily available in internet.
That could not be affordable for me to collect those data.
Page 13 of 55
1.5 Plan of chapters
The proposed study can be broadly categorized into four chapters. The brief
overview of each chapter has been listed below:
Chapter 1:
Introduction, methodology and summarize research conducted by me as well as the

relevant details regarding Balanced Advantage Fund
Chapter 2:
NATIONAL SCENARIO: History of Mutual Fund in India, Indian Mutual

Industry’s Average Assets Under Management, How Balanced Advantage Fund
works, Advantage Of Balanced Advantage Fund INTERATIONAL SCENARIO: Few
Mutual Fund global aggregators, Current and future growth expectation of global mutual fund
industry
Chapter 3:
Three case studies based on Balanced Advantage Fund i.e, HDFC Balanced Fund,
ICICI Balanced Advantage Fund and SBI Balanced Advantage Fund, their profile, transaction
plans and pricing, refund policies is discussed in this chapter. .
Chapter 4:
Suggestion as well as recommendation, bibliography of the study, questionnaire
Page 14 of 55
2.1 NATIONAL SCENARIO
2.1.1 History of Mutual Fund In India:
2.1.2 Indian Mutual Industry’s Average Assets Under Management
2.1.3 How Balanced Advantage Fund Work?
2.1.4Advantages of Balanced Advantage Fund?
2.1.8 Five Balanced Advantage Fund in India
2.2 INTERATIONAL SCENARIO

2.2.1 The Global Growth of Mutual Fund
2.2.2 Few Mutual Fund Global Aggregator
2.2.3 Current and future growth expectation of Global

Mutual Fund Industry
Page 15 of 55
CHAPTER 2:
CONCEPTUAL FRAMEWORK
2.1 Indian Scenario
2.1.1 History of Mutual Fund
A strong financial market with broad participation is essential for a developed economy. With this
broad objective India’s first mutual fund was establishment in 1963, namely, Unit Trust of India (UTI),
at the initiative of the Government of India and Reserve Bank of India ‘with a view to encouraging
saving and investment and participation in the income, profits and gains accruing to the
Corporation from the acquisition, holding, management and disposal of securities’.
In the last few years the MF Industry has grown significantly. The history of Mutual Funds in India can
be broadly divided into five distinct phases as follows:
FIRST PHASE - 1964-1987
The Mutual Fund industry in India started in 1963 with formation of UTI in 1963 by an Act of
Parliament and functioned under the Regulatory and administrative control of the Reserve Bank of
India (RBI). In 1978, UTI was de-linked from the RBI and the Industrial Development Bank of India
(IDBI) took over the regulatory and administrative control in place of RBI. Unit Scheme 1964 (US ’64)
was the first scheme launched by UTI. At the end of 1988, UTI had ₹ 6,700 crores of Assets Under
Management (AUM).
Page 16 of 55
SECOND PHASE - 1987-1993 - ENTRY OF PUBLIC SECTOR MUTUAL FUNDS
The year 1987 marked the entry of public sector mutual funds set up by Public Sector banks and Life
Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual
Fund was the first ‘non-UTI’ mutual fund established in June 1987, followed by Canbank Mutual Fund
(Dec. 1987), Punjab National Bank Mutual Fund (Aug. 1989), Indian Bank Mutual Fund (Nov 1989),
Bank of India (Jun 1990), Bank of Baroda Mutual Fund (Oct. 1992). LIC established its mutual fund in
June 1989, while GIC had set up its mutual fund in December 1990. At the end of 1993, the MF
industry had assets under management of ₹47,004 crores.
THIRD PHASE - 1993-2003 - ENTRY OF PRIVATE SECTOR MUTUAL FUNDS
The Indian securities market gained greater importance with the establishment of SEBI in April
1992 to protect the interests of the investors in securities market and to promote the development of,
and to regulate, the securities market.
In the year 1993, the first set of SEBI Mutual Fund Regulations came into being for all mutual
funds, except UTI. The erstwhile Kothari Pioneer (now merged with Franklin Templeton MF) was
the first private sector MF registered in July 1993. With the entry of private sector funds in 1993, a
new era began in the Indian MF industry, giving the Indian investors a wider choice of MF products.
The initial SEBI MF Regulations were revised and replaced in 1996 with a comprehensive set of
regulations, viz., SEBI (Mutual Fund) Regulations, 1996 which is currently applicable.
The number of MFs increased over the years, with many foreign sponsors setting up mutual funds in
India. Also the MF industry witnessed several mergers and acquisitions during this phase. As at the
end of January 2003, there were 33 MFs with total AUM of ₹1,21,805 crores, out of which UTI
alone had AUM of ₹44,541 crores.
Page 17 of 55
FOURTH PHASE - SINCE FEBRUARY 2003 – APRIL 2014
In February 2003, following the repeal of the Unit Trust of India Act 1963, UTI was bifurcated into
two separate entities, viz., the Specified Undertaking of the Unit Trust of India (SUUTI) and UTI
Mutual Fund which functions under the SEBI MF Regulations. With the bifurcation of the erstwhile
UTI and several mergers taking place among different private sector funds, the MF industry entered its
fourth phase of consolidation.
Following the global melt-down in the year 2009, securities markets all over the world had tanked and
so was the case in India. Most investors who had entered the capital market during the peak, had lost
money and their faith in MF products was shaken greatly. The abolition of Entry Load by SEBI,
coupled with the after-effects of the global financial crisis, deepened the adverse impact on the Indian
MF Industry, which struggled to recover and remodel itself for over two years, in an attempt to
maintain its economic viability which is evident from the sluggish growth in MF Industry AUM
between 2010 to 2013.
FIFTH (CURRENT) PHASE – SINCE MAY 2014
Taking cognisance of the lack of penetration of MFs, especially in tier II and tier III cities, and the need
for greater alignment of the interest of various stakeholders, SEBI introduced several progressive
measures in September 2012 to "re-energize" the Indian Mutual Fund industry and increase MFs’
penetration.
In due course, the measures did succeed in reversing the negative trend that had set in after the global
melt-down and improved significantly after the new Government was formed at the Center.
Since May 2014, the Industry has witnessed steady inflows and increase in the AUM as well as the
number of investor folios (accounts).
Page 18 of 55
The Industry’s AUM crossed the milestone of ₹10 Trillion (₹10 Lakh Crore) for the first time as on
31st May 2014 and in a short span of about three years the AUM size had increased more than two
folds and crossed ₹ 20 trillion (₹20 Lakh Crore) for the first time in August 2017. The AUM size
crossed ₹ 30 trillion (₹30 Lakh Crore) for the first time in November 2020.
The overall size of the Indian MF Industry has grown from ₹ 6.89 trillion as on 30th June 2012 to ₹
35.64 trillion as on 30th June 2022, more than 5 fold increase in a span of 10 years.
The MF Industry’s AUM has grown from ₹ 18.96 trillion as on June 30, 2017 to ₹35.64 trillion as on
June 30, 2022, around 2 fold increase in a span of 5 years.
The no. of investor folios has gone up from 5.82 crore folios as on 30-June-2017 to 13.47 crore as on
30-June-2022, more than 2 fold increase in a span of 5 years.
On an average 12.74 lakh new folios are added every month in the last 5 years since June 2017.
The growth in the size of the industry has been possible due to the twin effects of the regulatory
measures taken by SEBI in re-energising the MF Industry in September 2012 and the support from
mutual fund distributors in expanding the retail base.
MF Distributors have been providing the much needed last mile connect with investors, particularly in
smaller towns and this is not limited to just enabling investors to invest in appropriate schemes, but
also in helping investors stay on course through bouts of market volatility and thus experience the
benefit of investing in mutual funds.
MF distributors have also had a major role in popularising Systematic Investment Plans (SIP) over the
years. In April 2016, the no. of SIP accounts has crossed 1 crore mark and as on 30th June 2022 the
total no. of SIP Accounts are 5.55 crore.
Page 19 of 55
• The Industry’s AUM crossed the milestone of ₹10 Trillion (₹10 Lakh Crore) for the first time
as on 31st May 2014 and in a short span of about three years the AUM size had increased more
than two folds and crossed ₹ 20 trillion (₹20 Lakh Crore) for the first time in August 2017. The
AUM size crossed ₹ 30 trillion (₹30 Lakh Crore) for the first time in November 2020.
• The overall size of the Indian MF Industry has grown from ₹ 6.89 trillion as on 30th June 2012
to ₹ 35.64 trillion as on 30th June 2022, more than 5 fold increase in a span of 10 years.
• The MF Industry’s AUM has grown from ₹ 18.96 trillion as on June 30, 2017 to ₹35.64 trillion
as on June 30, 2022, around 2 fold increase in a span of 5 years.
• The no. of investor folios has gone up from 5.82 crore folios as on 30-June-2017 to 13.47 crore
as on 30-June-2022, more than 2 fold increase in a span of 5 years.
• On an average 12.74 lakh new folios are added every month in the last 5 years since June 2017.
The growth in the size of the industry has been possible due to the twin effects of the regulatory
measures taken by SEBI in re-energising the MF Industry in September 2012 and the support from
mutual fund distributors in expanding the retail base.
MF Distributors have been providing the much needed last mile connect with investors, particularly in
smaller towns and this is not limited to just enabling investors to invest in appropriate schemes, but
also in helping investors stay on course through bouts of market volatility and thus experience the
benefit of investing in mutual funds.
Page 20 of 55
2.1.2 Indian Mutual Fund Industry’s Average Assets Under Management (AAUM)
Average Assets Under Management (AAUM) of Indian Mutual Fund Industry for the month of June
2022 stood at ₹ 36,98,327 crore.
Assets Under Management (AUM) of Indian Mutual Fund Industry as on June 30, 2022 stood at ₹
35,64,090 crore.
The AUM of the Indian MF Industry has grown from ₹ 6.89 trillion as on June 30, 2012 to ₹35.64
trillion as on June 30, 2022 more than 5 fold increase in a span of 10 years.
The MF Industry’s AUM has grown from ₹ 18.96 trillion as on June 30, 2017 to ₹35.64 trillion as on
June 30, 2022, around 2 fold increase in a span of 5 years.
The Industry’s AUM had crossed the milestone of ₹10 Trillion (₹10 Lakh Crore) for the first time in
May 2014 and in a short span of about three years, the AUM size had increased more than two folds
and crossed ₹ 20 trillion (₹20 Lakh Crore) for the first time in August 2017. The AUM size crossed ₹
30 trillion (₹30 Lakh Crore) for the first time in November 2020. The Industry AUM stood at ₹35.64
Trillion (₹ 35.64 Lakh Crore) as on June 30, 2022.
The mutual fund industry has crossed a milestone of 10 crore folios during the month of May
2021.
The total number of accounts (or folios as per mutual fund parlance) as on June 30, 2022 stood at 13.47
crore (134.7 million), while the number of folios under Equity, Hybrid and Solution Oriented Schemes,
wherein the maximum investment is from retail segment stood at about 10.72 crore (107.2 million).
Page 21 of 55
2.1.3 How Balanced Advantage Fund works ?
The Fund pitch is straightforward: when equity markets rise, Balanced Advantage Funds (BAFs)
automatically sell equity, limiting your downside. However, when equity markets are down, your BAF
will buy stocks and profit when the markets rise. It relieves you of the responsibility of asset allocation.
But not all BAFs behave in the same way ,The sales pitch may be common, but their paths are
different. This impacts their performance. When equity markets fell between October and December
2021
An analysis based on data by CRISIL Ltd shows that there are broadly four different types of BAFs out
there, just going by their equity allocation throughout the year of 2021.
Schemes like Kotak Balanced Advantage Fund and DDAF consistently held around 30 percent in
equities.
Schemes like IDFC Balanced Advantage Fund and ICICI Prudential Balanced Advantage Fund held
around 40 percent in equities.
Page 22 of 55
Two schemes, Edelweiss BAF and HDFC BAF held between 60-70 percent in equities.
Page 23 of 55
The equity component of the fourth lot, with schemes like Nippon India Balanced Advantage
Fund and Axis Balanced Advantage Fund, swung wildly, throughout 2021.
There are three strategies that BAFs follow. One strategy is a pro-cyclical -It purchases high and sells
even higher. It buys more stocks at the start of a bull market and sells at the peak, Edelweiss BAF is a
classic example, this BAF also deliver in the long run of protecting the downside in falling markets and
capturing the upside in rising markets. But due to its unique model, this BAF model might fall more
than the markets in the initial 5-10 percent correction. Then, it makes up and captures the trend
Page 24 of 55
The second strategy, the most popular of them all, is counter-cyclical. This fund sell equities when
markets are a peak and buy as the markets starts to fall. This fund are lesser volatile than most other
BAFs and are meant for medium risk-takers, ICICI Prudential BAF is a classic example
The third strategy is a high equity allocation, no matter where the markets are. For a long time, HDFC
BAF’s equity allocation was in excess of 65 percent. But since September 2021, its equity allocation
fell to below 60 percent; it still qualifies as an equity-oriented fund (minimum 65 percent equity
allocation) due to presence of arbitrage investments in its portfolio to make up for the equity shortfall.
Does BAF fit your portfolio?
Since BAFs aim to control your downside and reward you on the upside, a BAF should ideally fall
lesser than SENSEX in falling markets. It should also ideally outperform debt funds since BAFs are
hybrid funds; they invest in equities and debt instruments.
Between October 2021 and January 2022 BAFs fell by less than 3 percent. The BSE Sensex fell by
little over 7 percent.
An analysis of BAFs over a series of 5-year and 3-year time periods shows that BAFs delivered over
the long run. We took rolling returns, instead of point-to-point returns, to judge their consistency. Over
a series of both, 5-year and 3-year time periods stretching all the way back to the year of 2015, BAFs
gave nearly 8 percent return, on an average. Its maximum 5-year return has gone up to 11.12 percent,
but on the downside, no BAF has lost your money, so far. In simple words, no BAF has given negative
return over a 5-year period.
Page 25 of 55
How Arbitrage is used in Balanced Advantage Funds?
These funds invest about 30-40 percent in equity and debt each, with the remaining in arbitrage.
However, these funds dynamically manage their asset allocation based on fund managers' view of the
market. The arbitrage portion of balanced advantage funds has dual benefits. It provides returns similar
to liquid funds and together with equity, it enables these funds to enjoy equity-like taxation benefits.
2.1.4 Advantage Of Balanced Advantage Fund
Balanced Advantage Fund gives investors the freedom from managing equity and debt allocation
manually during market ups and downs, ensuring balanced growth. The reasons why investors take
exposure in BAFs
1. Equity Growth
Balanced Advantage Funds usually manage an equity allocation between 20% and 80% as per the
market valuations. In doing so, Balanced Advantage Funds invest predominantly in stocks and other
equity-related instruments to gain appreciation in the equity market. This leads to greater wealth
generation, and investment in equities also allows investors to earn inflation-beating returns.
2. Stability
When equity valuation is high, fund managers based on a pre-defined in-house investment model reduce
exposure to equity and increases exposure to debt. Exposure to debt acts as a cushion in volatile equity
markets. Depending upon the investment model of each fund, the fund can tactically take duration and
credit calls to benefit from higher YTM and price fluctuations, which further contribute to the fund’s
performance.
3. Diversification
Since this is an open-ended fund for income distributions and capital gains, the dynamic rearrangement
of assets between fixed income and equity allows you to diversify your portfolio. Using arbitrage
opportunities and equity derivatives strategies, pure equity investments can be made, and debt securities
4. Can be simultaneously managed.

By offering a mix of debt, arbitrage, and equity, the product is best suited for retirement planning and
can perform well even in flat markets. Besides, after considering your risk profile, the scheme can be
blended with large-funds and debt funds for further diversification.
Page 26 of 55
2.1.5 Five Different Balanced Advantage Fund
#1 – Edelweiss Balanced Advantage Fund

Funds Investment Strategy
The scheme will invest in arbitrage opportunities, equity derivative strategies, pure equity investments
and the balance in debt and money market instruments.
Funds Performance and Risk Statistics
This fund has a low beta of 0.61. Beta refers to the volatility of the fund compared to its benchmark
(which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the
benchmark.
This fund has a high alpha of 5.65. Alpha is excess returns earned over the benchmark. Any fund that
has alpha of more than zero can provide higher returns compared to benchmark.
Currently it invests 65% in equity, 30% in debt instruments and balance holds in cash.
From a 3 year rolling return perspective, this fund generated:
▪ Over 12% returns – 43% of the times

▪ 8% to 12% returns – 38% of the times
▪ < 8% returns – 19% of the times
▪ Negative returns – Zero times
From a 5 year rolling return perspective (to 2013 where direct funds data are available), this fund
generated:

Page 27 of 55
#2 – HDFC Balanced Advantage Fund
The Scheme seeks to provide long term capital appreciation / income from a dynamic mix of equity and
debt investments.
This fund has a beta of 1. Beta refers to the volatility of the fund compared to its benchmark (which is
1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.
This fund has a minimal alpha of 0.1. Alpha is excess returns earned over the benchmark. Any fund that
has alpha of more than zero can provide higher returns compared to benchmark.
Currently it invests 64% in equity, 18% in debt instruments and balance holds in cash.

▪ Negative returns – 10% of the times
generated:

Page 28 of 55
#3 – ICICI Pru Balanced Advantage Fund
The scheme seeks to provide capital appreciation and income distribution to the investors by using equity
derivatives strategies, arbitrage opportunities and pure equity investments.
benchmark.
This fund has an alpha of 0.77. Alpha is excess returns earned over the benchmark. Any fund that has
alpha of more than zero can provide higher returns compared to benchmark.
Currently it invests 39% in equity, 28% in debt instruments and balance is held in cash.

generated:

Page 29 of 55
#4 – Nippon India Balanced Advantage Fund
The scheme seeks to capitalize on the potential upside in the equity markets 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.
benchmark.
Currently it invests 53% in equity, 26% in debt instruments and balance is held in cash.

▪ Negative returns – zero times
generated:

Page 30 of 55
#5 – Aditya Birla Sun Life Balanced Advantage Fund
The Scheme seeks to generate long term growth of capital and income distribution with relatively lower
volatility by investing in a dynamically balanced portfolio of Equity & Equity linked investments and
fixed-income securities.
benchmark.
Currently it invests 49% in equity, 32% in debt instruments and balance it holds in cash.

generated:

Page 31 of 55
2.2.1 The Global Growth of Mutual Fund
The global mutual fund assets market size was valued at $54.93 trillion in 2019, and is projected to
reach $101.2 trillion by 2027, growing at a CAGR of 11.3% from 2020 to 2027. Surge in investment
toward mutual fund, which enables small & large fund savers to participate in investment plans is
becoming a major growth factor to the market. In addition, advanced portfolio management services,
convenience & fair pricing in terms of investments, and implementation of digitalized technologies
propel the mutual fund assets market growth. However, highly volatile capital market environment and
high expense ratio & sales charges are some of the factors that limit the market growth. Furthermore,
developing economies offer significant opportunities for mutual fund providers to expand & develop
their existing portfolio with affordable & better returns on investments. In addition, increased support
and new initiatives by governments toward the mutual fund assets market are expected to provide
lucrative opportunities during the forecast period.
The equity funds segment dominated the mutual fund assets market in 2019 and is projected to maintain
its dominance during the forecast period. This is attributed to the fact that investors invest primarily in
individual stocks of publicly traded companies. Moreover, factors such as diversification, systematic
investments & withdrawals, and professionally money management with analyzing current & potential
holdings for stock funds are driving the growth of this segment during the forecast period.
The report focuses on the growth prospects, restraints, and trends of the mutual fund assets market
analysis. The study provides Porter’s five forces analysis to understand the impact of various factors,
such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat
of substitutes, and bargaining power of buyers, on the mutual fund assets market.
Segment review
The mutual fund asset market is segmented on the basis of fund type, distribution channel, investor
type, and region. In terms of fund type, it is segmented into equity funds, bond funds, money market
funds, and hybrid & other funds. On the basis of distribution channel, it is classified into banks, financial
advisors/brokers, direct sellers, and others. By investor type, it is divided into institutional and individual.
Region-wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
Page 32 of 55
The report analyses the profiles of key players operating in the market, including BlackRock, Inc., BNP
Paribas Mutual Fund, Capital Group, Citigroup Inc., Goldman Sachs, JPMorgan Chase & Co., Morgan
Stanley, PIMCO, State Street Corporation, and The Vanguard Group, Inc. These players have adopted
various strategies to increase their market penetration and strengthen their position in the industry.
COVID-19 impact analysis
COVID-19 pandemic has a moderate impact on the mutual fund assets market, owing to increased cases
of corporate defaults as the cash flow position has been hampered tremendously. However, as lockdown
in several regions has severely impacted the movement of consumers and disruption of businesses across
the globe, customers are availing offers of mutual funds via online platforms. This, in turn, has become
one of the major growth factors for the mutual fund assets market during the pandemic situation.
Page 33 of 55
Implementation of digitalized technologies
has helped to achieve customer loyalty by installing more integrated and value-added services. Therefore,
to provide convenient & efficiency services and reduce operational cost, there is increased deployment
and implementation of technologies, which are driving the market growth.
Increased investment in mutual funds
Increase in emphasis on domestic savings, rise in disposable income, and mobilization & allocation of
the income toward profitable investments are some of the factors that propel the growth of investments
in mutual funds. Moreover, it enables small & large fund savers globally to participate in investment
plans and derive the benefits of the capital market growth. Furthermore, the mutual fund industry has
witnessed massive expansion & standardization in terms of products & services offered, increased
proliferation of a large number of private sector funds, and regulatory mechanism, which consequently
fuelled the market growth.
Page 34 of 55
Surge in government support & initiatives for the mutual fund assets market
Governments, regulatory bodies, and other authorities across several countries are expected to boost and
expand their existing mutual funds industry. In addition, the regulatory bodies continue to look for
enhancing the expansion & penetration by executing tie-ups with e-wallets, e-commerce distribution,
and other such platforms in the market. Furthermore, the distributors of mutual funds in several regions
play an active role and are largely encouraged by the respective country’s government. Therefore, this
factor is accelerating the revenue growth of mutual fund providers by enhancing quality & depth of the
engagement with channel partners. Furthermore, increased government support and advanced initiatives
toward mutual funds are expected to provide lucrative opportunities to the market in the coming years.
2.1 International Scenario
2.1.3 Few Global Asset Management Company Aggregators:
Page 35 of 55
2.1.4 Current and future growth expectation of Mutual Fund
Clearly, asset managers can’t depend on AUM (assets under management) growth and the fees it
generates to sustain their business as they once did. In 2019, we estimated US AUM growth would
average 5.6% annually between 2018 and 2025; we now forecast such growth to hit only 3.1% between
2019 and 2025. There’s a much more difficult road ahead. Meanwhile, the market keeps shifting into
passive funds. In 2019, passives accounted for 39% of total US mutual fund/ETF industry assets. By
2025, we estimate they’ll account for 55% of the industry’s total assets (see Figure 1).
While this shift to passive inherently results in lower revenues for managers, downward fee pressure
isn’t new. By 2025, we calculate that expense ratios across active and passive funds will be about a
third lower than their already low levels in 2019 (see Figure 2). The ongoing decline in total expense
ratios (TERs) for both active and passive funds means fund managers could find it hard, or impossible,
to find any profit margin improvement.
Lastly, there is one trend that is consistent across fund products and the workplace: the rise of
environmental, social and governance (ESG) funds. Consumers are demanding it, and workers are
expecting it. In fact, we anticipate that total assets of ESG-based funds will grow an average of 10%
annually between 2019 and 2025.
Source https://www.pwc.com/us/en/industries/financial-services/library/mutual-fund-outlook.html
Page 36 of 55
CASE STUDY
• Case Study 1:
3.1 SBI BAF
• Case study 2:
3.2 HDFC BAF
• Case study 3:
3.3 NIPPON BAF
• Sample data analysis

3.4 from questionnaire
Page 37 of 55
CHAPTER 3: CASE STUDY
3.1 Case study 1: SBI BALANCED ADVANATGE FUND
PROFILE:
Page 38 of 55
Page 39 of 55
Page 40 of 55
Page 41 of 55
Page 42 of 55
Case study 2 :HDFC Balanced Advantage Fund
PROFILE:
Page 43 of 55
Page 44 of 55
Page 45 of 55
Page 46 of 55
Page 47 of 55
Page 48 of 55
Page 49 of 55
3.2 Case study 3: NIPPON Balanced Advantage Fund
PROFILE:
Page 50 of 55
Page 51 of 55
Page 52 of 55
Page 53 of 55
3.3 Data Representation and Interpretation
1) Age:
Below
18-35 35-45 45-60 Above 60
0 7 8 0
Interpretation:
Out of the 15 sample respondents, 46.7% respondents are between the age of 35 to
45 and 53.3% respondents are more than 45 years of age.
2) Are you IFA or Banker:
IFA Banker
12 3
Interpretation:
Out of the 15 sample respondents, majority 80% are IFAs and rest of the respondents
are Banker of various branches.
3) On the scale of 1-5 how much does your client prefer Balanced Advantage Fund
21 3 4 5
00 4 6 5
Interpretation:
Out of the 15 sample respondents 26.7% majority common to like Balanced Advantage
Fund , and 40 % aggregators gave it a 4 rating and rest 33.33% gave 5 rating to Balanced
Advantage Fund . So, Balanced Advantage fund is very popular among the IFAs and Investors
.
Page 54 of 55
4) Which AMCs Balanced Advantage Fund do your Client Prefer
HDFC ICICI SBI NIPPON

1 10 3 1
-Interpretation:
Out of the 15 sample respondents, majority 66.7% prefer ICICI Balanced Advantage Fund
Followed by SBI Balanced Advantage Fund.
5) Reason For the preference of the company
Flexibility Ease of Returns

Transaction
0 0 15
Interpretation:
Out of the 15 sample respondents, 100 % respondents are satisfied with the ICICI
Balanced Advantage Fund because of its returns .
6) On the scale of 1 to 5 how much does your client prefer ICICI Balanced Advantage Fund ?
0 2 3 4 5
0 1 2 11 1
Interpretation:
Out of the 15 sample respondents, majority 73.3% respondents’ client like ICICI
Balanced Advantage Fund .
Page 55 of 55
7) Reason For Ratings :
Flexibility Ease Of Returns

Transaction
1 0 14
Interpretation:
Out of the 15 sample respondents, majority 93.3% choose Balanced Advantage

Fund because of it’s ratings
RETURNS ANALYSIS
Page 56 of 55
4.1
4.2 • Recommendation
4.3 • Bibliography &

References
4.4 • Questionnaire
Page 57 of 55
CHAPTER 4:
RECOMMENDATIONS & SUGGESTION
From my study I can conclude the following points-
• Age group 45 to 60 are dominant Investor In Balanced Advantage Fund

• In Kolkata ICICI AMC have a very good reputation and brand name .
• There should be given more time and concentration on the tier-3 Distributor.
• Time to time presentation and training and classes about the product should be organized for
all distribution channel .
• With interacting with the investor I found that most of the costumer are unaware of
mutual fund, some of the people look upon mutual fund and equity trading as gambling
thus mutual fund awareness program can help to increase the penetration of mutual
fund in the market .
• After sale services and follow up calls are important for getting new references so
trained tele sales should be appointed for this purpose whose sole work should be to
make feedback calls.
• Company should have scheme of rewards and recognition to employees and the field
person to boost their motivation.
• Awareness camp should be organized , In this type of camp fund partners & other sub
broker should write their misunderstanding about the product or application, they
should be aware of new product and application
• According to my survey quality improvement is essential for growth in the market
• Business Opportunity program should be organized time to time because this aspect is
very necessary this aspect is very necessary for every company.
• It has been seen that there is major increase in percentage who have large amount of
disposable income with them and want to invest , these type of prospective client should
tapped at early stage.
• Small towns, villages are still untapped and can also acts as a business area of very huge
potential.
• Now even co-operative society can invest up to 10 % of their capital in mutual Funds
which open the door to new and very important client base
Page 58 of 55
4.2 BIBLIOGRAPHY / REFERENCES
JOURNALS:
❖ (IJAMFI) International Journal of mutual fund and investment , Vol. 8, No. 5, 2017 :
https://pdfs.semanticscholar.org/3e60/35d2232d5f3db969a88d48695b6c58361609.pdf
❖ The ICICI Mutual Fund Sanjay kumar gupta
https://issuu.com/sanjaykumarguptaa/docs/icici-mutual-fund
❖ Chapter 4
https://www.essay48.com/3259-ICICI-AMC-Limited-Porters-Generic-Strategies
❖ https://www.sbimf.com/campaign/sbi-balanced-advantage-fund/assets/pdf/kim%20-
WEBSITES:
❖ Balanced Advantage fund Wikipedia: https://en.wikipedia.org/wiki/Balanced Fund
❖ SBI balanced Advantage blog sites: A https://blog.sbi.com/what-is-a-Balanced –Advantage -

fund/
❖ profitbooks.net best Balanced Advantage Fund in India: https://www.profitbooks.net/best-

Balanced-Advantage-Fund- india/
❖ TOP 10 Balanced Advantage Fund [UPDATED JULY 2022]:

https://www.brandloom.com/10-best-Balanced-Advantage-Fund-in-india
❖ SBIMF.com : https://SBIMF.com/Balanced Advantage Fund /
❖ NIPPONMUTALFUND.com: https://BalancedAdvantageFund.com/
IndianMfWikipedia page: https://en.wikipedia.org/wiki/Paytm
Page 59 of 55
4.3 Questionnaire
Dear Respondent,
I invite you to participate in a study entitled Balanced Advantage Fund: Investing Or

Branding Strategy. I, Saibal Maity, am currently enrolled in the Masters program (MBA) at
ARMY INSITUTE OF MANAGEMENT,KOLKATA in Kolkata. The information
provided by you willbe used for research purpose only. You may decline altogether,
. Your Participation is completely voluntary and reported only as a collective combined
total.
SAIBAL MAITY
[Please indicate (√) your opinion]
1. Name:
2. Gender : Male Female
3. Age:
a) 18-35 b) 35-45 c) 45-60 d) Above 60
4. Are you IFAs or A Banker ?

a) IFAs b) Banker
5. Which AMCs Balanced Advantage Fund is best as per you in this Indian Mutual Fund
Industry?
a) ICICI b) SBI c) HDFC d)NIPPON
b)
6.on the scale of 1-5 how much does your client/you prefer balanced advantage fund ?
1 2 3 4
7. Reason For Preference for AMC
Flexibility Ease of transaction Returns
8.On the scale of 1-5 how much does your client prefer icici balanced advantage fund ?
Page 60 of 55
Page 61 of 55

Balanced Advantage Fund (2) 22

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Balanced Advantage Fund (2) 22

Uploaded by

Copyright:

Available Formats

MAULANA ABUL KALAM AZAD UNIVERSITY OF TECHNOLOGY

SUMMER PROJECT REPORT ON

This is to certify that Mr Saibal Maity, MAKAUT Regn. No 211360700910083of 2021-2023,

Place: Kolkata Name: Saibal Maity

NAME: SAIBAL MAITY

1.1 Background of the Study

1.2 Objectives of the Study

1.3 Research Methodology

1.4 Limitations of the Study

1.5 Plan of chapters

2 CHAPTER 2: CONCEPTUAL FRAMEWORK

2.1.2 Indian Mutual Industry’s AAUM

2.1.3 How Balanced Advantage Fund work?

2.1.4Advantages of Balanced Advantage Fund

2.1.5 Five Different Balanced Advantage Fund

2.2 INTERATIONAL SCENARIO

2.2.1 Few online payment gateways global aggregators

2.2.2The Essential Components of a Reliable Payment Gateway

2.2.3 Current and future growth expectation of global online

3.2 Case study 2: HDFC Balanced Advantage Fund

3.3 Case study 3: NIPPON Balanced Advantage Fund

3.4 Sample Data from questionnaire

4 CHAPTER 4: SUGGESTION & RECOMMENDATIONS

4.3 Bibliography / References

Objectives of the Study

1.1 BACKGROUND OF THE STUDY

BALANCED ADVANTAGE FUND MODEL

How derivatives is used in Balanced Advantage Funds?

A research objective is a clear, concise, declarative statement, which provides

The main objectives of the study are listed below:

❖ To provide an overview of the Balanced Advantage Fund

❖ To provide Indian scenario in respect of Balanced Advantage Fund

Sampling Method: Convenience sampling

Period of the Study:

• Selecting only those respondents who are IFAs and Banker

Introduction, methodology and summarize research conducted by me as well as the

NATIONAL SCENARIO: History of Mutual Fund in India, Indian Mutual

Suggestion as well as recommendation, bibliography of the study, questionnaire

2.1.2 Indian Mutual Industry’s Average Assets Under Management

2.1.3 How Balanced Advantage Fund Work?

2.1.4Advantages of Balanced Advantage Fund?

2.1.8 Five Balanced Advantage Fund in India

2.2 INTERATIONAL SCENARIO

2.2.2 Few Mutual Fund Global Aggregator

2.2.3 Current and future growth expectation of Global

2.1.1 History of Mutual Fund

FIRST PHASE - 1964-1987

THIRD PHASE - 1993-2003 - ENTRY OF PRIVATE SECTOR MUTUAL FUNDS

FIFTH (CURRENT) PHASE – SINCE MAY 2014

Does BAF fit your portfolio?

2.1.4 Advantage Of Balanced Advantage Fund

4. Can be simultaneously managed.

#1 – Edelweiss Balanced Advantage Fund

Funds Performance and Risk Statistics

From a 3 year rolling return perspective, this fund generated:

▪ Over 12% returns – 43% of the times

▪ Over 12% returns – 44% of the times

Funds Performance and Risk Statistics

From a 3 year rolling return perspective, this fund generated:

▪ Over 12% returns – 33% of the times

▪ Over 12% returns – 60% of the times

Funds Performance and Risk Statistics

From a 3 year rolling return perspective, this fund generated: