The Wealth Company Balanced Advantage Fund: A true to label BAF aligned with current market structure

The Wealth Company MF has launched a new fund offer (NFO), The Wealth Company Balanced Advantage Fund. This fund will dynamically manage its asset allocation between debt and equity depending on market conditions. The NFO will open for subscription on 27^th January 2025 and close on 10^th February 2025.

Current market context

The equity market has turned volatile due headwinds from geo-political tensions, tariff related uncertainty, FII selling leading to INR depreciation. Heightened geo-political uncertainty, especially as it related to trade is the new normal now and this can cause equity market volatility to remain elevated or even increase further. In current market conditions balanced advantage funds aims to provide stability to your investment portfolio, by limiting downside risks.

Why invest in Balanced Advantage Funds?

• Emotional biases like fear and greed often drive misguided financial decisions. Balanced Advantage Fund can help investors manage emotions and prevent them from acting irrationally. When the market cashes, balanced advantage funds can reduce or hedge their equity exposure, thus limiting capital loss. When the market rises, balanced advantage funds can increase their equity allocation addressing the fear of missing out on the rally.


• Equity returns are cyclical, in other words, equity underperforms (versus other asset classes, e.g., debt) after a period and then outperforms again (see the chart below). Diversification across asset classes will bring stability to your portfolio.
  
  

  

  Source: Advisorkhoj Research, National Stock Exchange, as on 31^st December 2025



• Currently, Nifty and global volatility; on average; is trading well below its long-term average. This suggests that markets may be under-pricing risk, and the probability of higher volatility ahead cannot be ruled out.
  
  

  

  Source: Advisorkhoj Research, National Stock Exchange, as on 31^st December 2025



• Geopolitical uncertainty has increased, especially in the last one year or so. Balanced Advantage Funds aims to manage risk during Geo-political uncertainty.


• The US Economic Policy Uncertainty (EPU) Index, which measures policy-related economic uncertainty have spiked up to unprecedented levels, not seen in last 20 years.


• The chart below shows the drawdowns of balanced advantage fund category versus the broad market indices like Nifty 50 and Nifty 500 TRI. Balanced advantage fund can limit downside risks for investors.
  
  

  

  Source: National Stock Exchange, ACE MF, as on 31^st December 2025

How is The Wealth Company Balanced Advantage Fund unique vis a vis other BAFs?

• The Wealth Company Balanced Advantage Fund aims to be truly market cap agnostic. The large cap exposure of The Wealth Company Balanced Advantage Fund may be in the range of 50-85% of the equity exposure in medium to long term subject to market condition. The Midcap/ Small Cap exposure of the fund may be in the range of 15- 50% of the equity exposure in medium to long term subject to market conditions. (The actual Portfolio will be managed as per stated Investment objective, investment strategy & asset allocation in the Scheme Information Document (SID) and is subject to the changes within provisions of SID of the Scheme)


• The net equity exposure of The Wealth Company Balanced Advantage Fund may range from 30-80%.


• Proprietary framework for rebalancing.
  
  

  

How is The Wealth Company Balanced Advantage Fund aligned to current market structure

• Market structure keeps changing based on macros, flows, growth etc


• The fund will use 5 year rolling average PE & PB


• 5 year period rolling average range is more representative of the changes in market structure than the ranges and averages of 10/15/20 years

Back-testing results

Source: The Wealth Company MF, Back test period from January 2010 to December 2025. 1. CRISIL Hybrid 50+50 Moderate Index. 2. Balanced Advantage Fund category average

The TWC Balanced Advantage Fund model is a simulated portfolio that dynamically navigates between equities including arbitrage and debt, based on proprietary methodology. This methodology is built on valuation factors (e.g. P/E, P/ B) and momentum factor as guide for exposure to equities and fixed income to manage volatility and risk adjusted returns. This does not guarantee or show scheme results. The actual Portfolio will be managed as per stated Investment objective, investment strategy & asset allocation in the Scheme Information Document (SID) and is subject to the changes within provisions of SID of the Scheme

Framework for Stock-selection - EDGE

Framework for fixed income securities selection – EPOCH

Who can find The Wealth Company Balanced Advantage Fund suitable?

• 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 their financial advisors or mutual fund distributors if The Wealth Company Balanced Advantage Fund is suitable for their investment needs.