UTI Balanced Advantage Fund: Stability in volatile market conditions

Current market context

The equity market is in a consolidation phase after the Government's GST reform and Fed Rate cut helped stocks to counter the tariff headwinds. However, weak global cues, strengthening US Dollar, and concerns about valuations have led to profit booking. With India underperforming in the emerging markets pack, foreign institutional investors sell off has continued unabated for the last 3 months. In these difficult market conditions, investors need to have a disciplined approach and focus on asset allocation.

Importance of disciplined investing

Informed investment decisions and discipline are essential for achieving our financial objectives. However, it is natural for humans to have behavioural biases. Behavioural factors e.g., greed and fear, herd mentality, loss aversion bias etc in volatile equity markets, can lead to wrong decisions and sub-optimal returns. These behavioural biases come to fore in uncertain market conditions and may be extremely detrimental to your financial interests. For example, panic selling in falling market can lead to permanent loss.

Futility of trying to time the market - Focus on asset allocation

Many investors aim to buy at the very bottom and sell at the very top. Predicting the correct timing of entry and exit is extremely difficult because prices in the short term are driven by sentiments, rather than fundamentals. Instead of trying to time the market, investors should focus on asset allocation. A 1986 study done in the United States showed that asset allocation is the most important determinant of portfolio performance (source: Brinson, Hood, Beebower, Financial Analyst Journal 1986).

Dynamic Asset Allocation or Balanced Advantage Funds

In Balanced Advantage funds, the asset allocation between equity and fixed income (debt) is managed dynamically depending on prevailing market conditions. When equity valuations are high, the fund manager reduces the equity allocation by either hedging the equity exposure or shifting some equity allocation to debt and vice versa for when equity valuations are low. This ensures that in the ensuing correction investors do not see a big fall in the investment value. At the same time, investors get to participate in the recovery from market bottom. Balanced Advantage funds typically follow the "Buy low, Sell High" approach.

In this article, we will review UTI Balanced Advantage Fund.

About UTI Balanced Advantage Fund

UTI Balanced Advantage Fund has completed 2 years since its launch. The fund has almost Rs 3,000 crores of assets under management (AUM). The expense ratio of the regular plan is 1.9%. The fund has given 12.4% CAGR return since inception (as on 24^th September 2025).

UTI Balanced Advantage Fund - Asset allocation Model

Factor based dynamic asset allocation model

Net equity exposure since inception

The fund's net equity allocation is maintained dynamically using proprietary asset allocation model (see the chart below).

Source: Advisorkhoj Research, as on 24^th September 2025

Performance versus broad market index

The chart below shows the growth of Rs 10,000 in UTI Balanced Advantage Fund versus the broad equity market index, Nifty 50 TRI. You can see that the fund's returns are comparable with Nifty.

Source: Advisorkhoj Research, as on 24^th September 2025

Smaller drawdowns

Despite giving equity like returns, the fund experienced much smaller drawdowns compared to broad market index. In other words, the UTI Balanced Advantage fund delivered superior risk adjusted returns.

Source: Advisorkhoj Research, as on 24^th September 2025

Outperformed peers across market conditions

The chart below shows the 1 year rolling returns of fund versus the category average since the inception of the fund. You can see that the fund has been consistently outperforming the category average.

Source: Advisorkhoj Research, as on 24^th September 2025

Why invest in UTI Balanced Advantage Fund ?

Who should invest in UTI Balanced Advantage Fund ?

• Investors looking for growth and stability.


• Investors seeking dynamic asset allocation based on market conditions.


• Investors with moderately high to high-risk appetite.


• The fund is suitable for first time investors.


• Investors should have minimum 3 year investment horizon for this fund.

Investors should consult with their financial advisor or mutual fund distributors if UTI Balanced Advantage Fund is suitable for their investment needs.