PGIM India Balanced Advantage Fund NFO

PGIM India Mutual Fund has announced the launch of PGIM India Balanced Advantage Fund. As per the scheme documents, the scheme will be dynamically allocating its assets across the equity and debt markets based on the equity market valuations. The fund aims to follow the strategy of “Buy Low and Sell High” in the equity market to generate long-term capital appreciation for investors.

The New Fund Offer (NFO) starts from 15th January 2021 and will end on 29th January 2021.

Investment Objective

The investment objective of the scheme is to provide long-term capital growth to investors by investing in equity and equity-related securities including equity derivatives strategies & arbitrage opportunities with the rest of its exposure in debt and money market instruments.

What is Balanced Advantage Fund?

Balanced Advantage Funds, also known as Dynamic Asset Allocation Funds is a sub-category of hybrid mutual funds. These funds can allocate their assets in both equity and debt instruments. The fund managers have the flexibility to switch from equity instruments to debt instruments and vice versa depending on the market conditions. For example- When the fund manager thinks that the equity markets are at their highs, then they would allocate a higher portion in debt instruments through a switch from equity securities. This helps to reduce the overall volatility in the portfolio.

Features

The Fund will be investing at least 65% of its assets in equity and equity-related instruments. Wherein, the minimum allocation to directional equity has been kept at 30% of its total assets.
The fund aims to deliver good returns with lower volatility & downside protection.
The fund also offers exposure to debt and money market instruments.
The fund uses the time-tested Dynamic Advantage Asset Allocation Facility (DAAAF) model to allocate its assets in equity and debt instruments.
The fund aims to follow the strategy of “Buy Low and Sell High” for equity investments.
The fund offers the benefit of tax efficiency through its DAAAF model. It will have the taxability of equity funds as the minimum allocation to equity & equity-related securities in this fund has been kept at 65% of the total assets.

About the Model- Investment Strategy

The fund allocates its assets across equity & debt securities by using the Dynamic Advantage Asset Allocation Facility Model (DAAAF Model).

DAAF is a unique P/E based asset allocation model. DAAAF model has 3 main strategies which are as follows:

When the current P/E is significantly lower than the long-term average P/E, it means that the equity market is undervalued. In this case, the model will recommend an entry into equity markets.
When the current P/E is significantly higher than the long-term average P/E, it means that the equity market is overvalued. In this case, the model will recommend an exit or switch from equity to debt instruments based on the defined bands.
When the current P/E is comparable with the long-term average P/E, it means that the equity market valuation is reasonable & close to the historical average PE. Here, the model will recommend a re-entry into equities.

Who Should Invest?

This scheme is suitable for investors who are -

Interested in long-term capital growth.
Interested in capital growth & income by making investments in equity and equity-related instruments along with exposure to debt and money market instruments.
Recommended for investors with an investment horizon of 3-5 years & above.

Asset Allocation Pattern-

Instruments	Minimum % of total assets (Indicative)	Maximum % of total assets (Indicative)	Risk Profile
Equity and Equity related securities	65%	100%	Moderate to High
Debt & money market instruments	0%	35%	Low to Moderate

About the scheme-

Name of the fund	PGIM India Balanced Advantage Fund
Fund launched by	PGIM India Mutual Fund
Asset Management Company	PGIM India Asset Management Private Limited
Type of scheme	An open-ended dynamic asset allocation scheme investing in equity and equity-related securities and the exposure of debt and money market instruments.
Investment Objective	The investment objective of the scheme is to generate long-term capital growth through investments in equity and equity-related securities along with arbitrage opportunities and balance exposure of debt and money market instruments.
Benchmark	CRISIL Hybrid 50+50 Moderate Index
Entry Load	Not Applicable
Exit Load	10% of the units redeemed or switched-out within 90 days - NIL, More than 10% of the units redeemed or switched-out within 90 days - 0.50% of applicable NAV If units are redeemed or switched out after 90 days - NIL
Minimum Application Amount	₹ 5,000 & in multiple of ₹ 1 thereafter
Minimum Additional Amount	₹ 1,000 & in multiple of ₹ 1 thereafter
SIP Top-up, STP,DTP & SWP	Available
Plans Available	Regular Direct
Options	Growth Dividend Payout Dividend Reinvestment
Fund Managers	Mr. Aniruddha Naha(Equity Securities), Mr. Kumaresh Ramakrishnan (Debt Securities), and Mr. Anandha Padmanabhan (Overseas investments)

SIP Details

Type	Minimum Installments	Minimum Amount
Monthly SIP	5	₹ 1,000 & in multiple of ₹ 1 thereafter
Quarterly SIP	5	₹ 1,000 & in multiple of ₹ 1 thereafter