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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 of the following best describes a 'Dynamic Asset Allocation or Balanced Advantage Fund'?

A Dynamic Asset Allocation or Balanced Advantage Fund is a hybrid scheme that shifts its allocation between equity and debt dynamically, often based on valuation models, rather than holding a fixed equity proportion or investing in a single asset class.

  1. AA hybrid scheme that dynamically manages allocation between equity and debtCorrect
  2. BA hybrid scheme that must hold a fixed 65% in equity at all times
  3. CA debt scheme that invests only in government securities
  4. DAn equity scheme that invests only in large-cap stocks

Explanation

Balanced Advantage Funds are hybrid schemes whose investment in equity and debt is managed dynamically, usually using a model. They do not hold a fixed equity proportion, and they are not pure debt or pure large-cap schemes.

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