Why Kotak Balanced Advantage Fund is Best Investment 2025?
Does looking for financial security in your day-to-day routine seem challenging? Well, not anymore. How? Let's see, introducing the Kotak Balanced Advantage Fund, a hybrid category fund that is a mix of both equity and debt, giving the best of both worlds.
Yes, standing tall with a great track record, this Balanced Advantage Fund (BAF) has given a stellar return of 13.14% in the last 5 years against a category return of 9.48%.
If you are stuck on the question, "Is Kotak Balanced Advantage Fund the best investment 2025?"
This analysis gives you a detailed fund review of this scheme, cross-checking on every selection parameter on which all the best mutual funds are measured.
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Let’s start with a quick overview of this hybrid category fund.
Overview of Kotak Balanced Advantage Fund
The Kotak Mutual Fund launched the scheme in 2018. It is an open-ended scheme, which means you can buy or sell the shares at any time. This offers you a great level of flexibility. This scheme aims to deliver huge capital for long-term investment.
It invests your money into various securities like equity, hybrid, and debt funds. Such a diverse asset allocation protects your portfolio when the market goes down. The following are some key features of the scheme:
- The fund invests around 60% of its assets in equity stocks, which are mostly large cap.
- The scheme manages a strong AUM (Asset Under Management) at Rs.16,542 crores as of 31.03.25 while holding the Net Asset Valueat Rs.19.479 (As of 16.04.25).
- The minimum investment amount for both the SIP and lump sum plan is Rs 100 only.
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Reviewing the Investing Style of Kotak Balanced Advantage Fund
The fund has a dynamic asset allocation strategy, meaning it keeps a diversified portfolio while adjusting it as per the market trends and variations in the economy. This helps the fund to aim for strong capital for the long term by equally balancing the equity and debt proportion.
Moreover, this hybrid fund strategically lowers the equity exposure when the market is overvalued and likewise increases the ratio during market corrections. The scheme has used this investment style to manage a well-diversified sector allocation. The next part explains the sector allocation for you.Want to know, “Why Kotak Balanced Advantage Fund could be your top investment choice in 2025?” Let’s dive into its impressive rolling returns over 3 and 5 years and how it outperforms its category.
What are the Rolling Returns of Kotak Balanced Advantage Fund Regular Growth?
The Kotak Balanced Advantage Fund (BAF) of the hybrid dynamic asset allocation category has delivered 12.7% returns over the last 3 years, outperforming its category average of 9.54%. This stellar performance has been achieved through the fund's investments in high-conviction stocks and active portfolio management according to market swings.
This is not it; the fund has a similar track record, as showcased in the 5-year returns, where it has beaten its category by giving 13.14% returns against 9.48%.
You can refer to the graph below to see the data in action:
The Kotak Balanced Advantage Fund is far better than its competitors. This has been possible only due to the investment style that the fund uses. Let's learn what makes it so special.
Important Read: How to start SIP in India? 101 Beginners Guide
Sector Allocation of Kotak Balanced Advantage Fund- Regular Growth
The scheme has invested most of its assets in 6 sectors. You can refer to the chart below to get a clear image of the sector allocation:
As you can see, the Kotak Balanced Advantage Fund has invested 15.84% of its assets in the financial sector alone. The mutual fund scheme also has invested around 11% assets in technology. And 7.86% of assets are in energy and utilities. These three sectors collectively hold almost 35% of the assets. This means that these sectors hold high growth potential for the future.
Anyway, the remaining three sectors are industrials (6.55%), consumer discretionary (5.47%) and materials (5.19%). Higher diversity in sector allocation means more protection against market fluctuations. This makes sure that you get returns with a great level of consistency on your Mutual Funds investment.
Is it Good to Invest in Balanced Advantage Funds?
The short answer is yes, balanced advantage funds are a good investment option for long-term investing with tax efficiency when rebalancing between equity and debt.
However, does this mean, “Kotak balanced advantage fund is the best choice in this category?” Let's find out by looking at its stock quality:
| Fundamental Ratios | Values |
|---|---|
| Sales Growth | 17.09% |
| Earnings Growth | 20.18% |
| Cash Flow | 16.04% |
| PE- Valuations | 19.23% |
The Kotak Balanced Advantage Fund does better than the average fund in terms of earnings growth and cash flow growth, meaning it focuses on companies that are making strong profits and generating good cash. It has a higher P/E (Price-to-earnings ratio), which suggests that the fund is investing in companies with high growth potential.
However, its sales growth is a bit lower than the average, which could mean it is investing in stable and stable companies for now rather than those growing quickly in sales. Overall, the fund aims to offer growth while keeping things stable.
Similarly, there is another way to check if Kotak balanced advantage fund is the best investment 2025 or not and that is by looking at the debt quality.
| Debt Quality | ||||
|---|---|---|---|---|
| Fund | Avg Credit Rating | Weighted Coupon | Modified Duration | Effective Maturity |
| Kotak Balance Advtg Fund | AA+ | 7.55 | 5.01 | 10.56 |
| Category Average | AAA | 7.54 | 3.09 | 5.18 |
The above table shows, the Kotak Balanced Advantage Fund has a credit rating of AA+, which is slightly lower than the category average of AAA, meaning it has a bit more risk in its debt investments. The weighted coupon (7.55%) is almost the same as the category average (7.54%), showing similar returns from its debt.
The modified duration (5.01) is higher than the category average (3.09), meaning it is more sensitive to changes in interest rates, which could cause bigger price swings. The effective maturity (10.56 years) is also much longer than the category average (5.18 years), meaning it holds more long-term debt, which can carry more risk but could also lead to higher returns over time.
If you are still confused about whether to invest in the scheme or not, then the next section will convince you for sure.
Don’t Miss On: Best SIP Plans for 3 Years: Equity, Debt & Hybrid Category
Why You Should Invest in Kotak Balanced Advantage Fund- Regular Growth?
The following are reasons why you should invest in the fund:
· Expert Fund Managers
Mr. Abhishek Bisen and Mr. Hiten Shah are lead fund managers of the scheme. They have more than 20 years of experience in equity and fixed income markets. Such experienced people are responsible for identifying the best stocks.
· Active Fund Management
The fund's portfolio gets adjusted regularly on the basis of market conditions. This helps the scheme deliver great returns throughout the market cycle. This means that even during slow growth, the portfolio keeps giving returns.
· High Level of Flexibility
The fund is highly flexible as it is an open ended scheme, meaning investors can sell or buy units at any time. And the minimum investment amount for SIP in the scheme is just Rs 100. Even students can invest in the scheme with such a low amount.
· Proven Performance
The fund has been beating its peers in large cap categories for the last 5 years. As you have assessed the rolling returns, it has been consistently giving such great returns. This is mostly due to its investment style and great focus on maintaining diverse sector allocation.
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Who Should Invest in Kotak Balanced Advantage Fund (BAF)?
The Kotak BAF is suitable for investors who:
- Want a mix of equity and debt for stability and growth.
- Are comfortable with moderate market risk.
- Prefer active management that adapts to market trends.
- Seek a long-term investment strategy.
- Are interested in tax benefits from a hybrid investment structure.
Smart Investments, Bigger Returns
Final Thoughts
Investors who can tolerate the market fluctuations for the long term should invest in the scheme. They will certainly gain huge capital on their SIP. This scheme is also suitable for new investors as it is less risky. Since the fund mostly invests in large cap companies, the risks are relatively low. Thus, it can be said that overall this scheme is suitable for investors who are seeking promised returns without taking very high risk.
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