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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Mutual Funds

Under SEBI's categorisation of mutual fund schemes, which feature distinguishes a 'Dynamic Asset Allocation or Balanced Advantage Fund' from an 'Aggressive Hybrid Fund'?

A Balanced Advantage Fund changes its equity and debt mix dynamically with no fixed equity range, whereas an Aggressive Hybrid Fund must keep 65-80% in equity and 20-35% in debt. This flexibility is what separates the two categories under SEBI's scheme categorisation.

  1. AIt must hold 65-80% in equity at all times
  2. BIt manages equity allocation dynamically, with no fixed equity rangeCorrect
  3. CIt invests only in debt and money market instruments
  4. DIt must invest at least 80% in large-cap stocks

Explanation

A Balanced Advantage Fund dynamically shifts between equity and debt, usually guided by a model, with no fixed equity band. An Aggressive Hybrid Fund must keep 65-80% in equity and 20-35% in debt. Hence the 65-80% option describes the Aggressive Hybrid category, not the Balanced Advantage one.

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