LIC Balanced Advantage Fund NFO launched


LIC Mutual Fund is coming out with a NFO in the form of LIC Balanced Advantage Fund.

LIC Balanced Advantage Fund as the name suggests, would be a balanced advantage fund.

The fund would be open for subscription from October 20, 2021 to November 03, 2021.


NFO details for LIC Balanced Advantage Fund

Scheme Opens


Scheme Closes


Fund Manager

Mr. Yogesh Patil

Mr. Rahul Singh


LIC MF Hybrid Composite 50:50 Index

Minimum Investment


Fund Category

Dynamic Asset Allocation

Exit Load

Nil for 12% of units if they are redeemed within a year

1% for remaining units if they are redeemed within a year.

Nil if redeemed or switched after a year.


LIC Balanced Advantage Fund would be an open - ended dynamic asset allocation fund investing in both debt and equity in varying proportions.


LIC mutual fund

LIC Balanced Advantage Fund Investment Objectives

The investment objective of the fund is to generate capital appreciation by dynamically allocating its assets between equity and specified debt securities.

There is no guarantee that the investment objectives of the scheme would be achieved.


Additional reading: Click Here to read everything you ever wanted to know about a NFO mutual fund

LIC Balanced Advantage Fund Allocation

The asset allocation for the fund would be something like this

Asset Class

Minimum %

Maximum %

Equity and Equity Related instruments



Debt and Money market instruments



Units issues by REITS and InvITs




The above figures are only indicative and not fixed, the fund managers have the liberty to move across the asset classes depending upon prevailing market conditions as long as they remain within the mandate permitted.

The fund can also invest in REITs and InvITs if so desired.



Are you investing in the right mutual funds?


What is a balanced fund? 

A dynamic asset allocation fund is more popularly known as a balanced advantage fund.

A balanced advantage fund is a type of hybrid fund.

It invests in debt, equity and arbitrage positions although the allocation is not fixed and can also sit on cash if the fund manager desires so.

Unlike other hybrid funds like multi asset, aggressive and conservative, a dynamic asset allocation or a balanced fund does not have a fixed mandate to follow.

The fund manager can move across different asset classes based on the prevailing market conditions.

The importance of a balanced fund is more felt during a bearish market phase since it can cut down its equity portion and at the same time make periodic equity purchases in the dip.

This is unlike other pure equity funds who at all times have to maintain their mandate irrespective of the market situation.



Taxation on LIC Balanced Advantage Fund

For the purpose of taxation, LIC Balanced advantage fund qualifies as an equity fund and the taxation charges applicable on it are as follows:


Long term capital gains tax better known as LTCG is applied on any equity mutual fund when the gains from an equity mutual fund which is held for more than a year is more than 1 lakh.

The LTCG rate is 10%.

Capital gains up to 1 lakh are exempt for taxes.

There is no indexation benefit when calculating LTCG.



Short term capital gains tax better known as STCG is applied on gains from an equity mutual fund which is held for 12 months or less.

The STCG rate is 15%.

There is no ceiling benefit in STCG like the 1 lakh ceiling in LTCG.

STCG is charged on from Re 1.


Additional reading: Click Here to read about mutual fund mistakes you should avoid making

Investment Strategy of LIC Balanced Advantage Fund

The fund will invest in equity and fixed income asset classes based on the fund house’s internal model.

This model will take into account factors such as PE and P/BV ratio and prevailing interest rate.

This model is designed to reduce human bias.

Exposure to equity will be derived by this model.


Are you investing in the right mutual funds?

Features of LIC Balanced Advantage Fund

The fund will adopt the Fundamental Based Mathematical Model (FMM).

The fund will be tax efficient since for tax purposes it will be considered an equity fund.

The fund will aim for equity returns with low volatility and stability.


Who can consider LIC Balanced Advantage Fund?

Investors who are seeking long term wealth creation.

Investors who are seeking diversification.

Investors seeking equity like returns with stability.

Investors unsure of market valuations.



LIC Balanced Advantage Fund Options

LIC Balanced Advantage fund  provides investors with the following two options

Growth: This option is most suited for investors who are not seeking dividends or who are not dependent on mutual fund dividends as a source of monthly income and would rather see their capital appreciate.

Income Distribution cum capital withdrawal :This option is most suited for investors who are seeking dividends or who are dependent on mutual fund dividends as a source of monthly income and are not looking for capital appreciation.

In case you do not opt for a particular option between growth and income distribution cum capital withdrawal option then the default option would be growth.




         Unlike equity funds, a balanced advantage fund has less restrictions and more flexibility meaning every fund manager will manage it in a manner that she feels fit.

       With a balanced advantage fund, how it does in a bull market is of less importance compared to how it performs in a bear market and that is how its nav should also be judged.

     If high returns is all you focus on then a balanced advantage fund should not take your time and money.

For portfolio enquiriesemail us with your doubts at

Disclaimer : While due precaution has been undertaken in the preparation of this article, The Mutual Fund Guide or any of its authors will not be held liable for any investments based on the above article. The above article should not be considered financial advice and has been published only for your perusal. Due credit has been given in case wherever required, in case you feel any part violates any rights then do get in touch with us and we shall get it duly removed.  
Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing

Copyright © 2021  The Mutual Fund Guide, All rights reserved

My Instagram