Nippon India Balanced Advantage Fund: Growth Performance, Return Analysis, Portfolio Composition and Risk Analysis

Nippon India‘s Balanced Advantage Fund is a compelling investment opportunity for discerning investors seeking long-term capital growth with a balanced risk-return profile. Its robust growth performance, consistent returns, diversified portfolio, and superior risk management practices position it favourably to navigate through evolving market dynamics successfully.

Nippon India Balanced Advantage Fund – Growth Performance


1-Year Growth: It has showcased an impressive growth trajectory, boasting a remarkable 24.45% Compound Annual Growth Rate (CAGR) over the past year. This robust performance significantly surpasses both its benchmark indices and peers in the category, reaffirming its ability to capitalize on market upswings effectively while mitigating downside risks.

3-Year Stability: Over 3 years, the fund has exhibited commendable stability, delivering a solid 13.33% CAGR. This consistent performance underscores the fund’s resilience in various market conditions, giving investors confidence to achieve their long-term financial objectives.

5-Year Steadiness: With a 5-year CAGR of 11.74%, the fund has demonstrated steadfast growth, further consolidating its position as a reliable investment option for those seeking sustained wealth accumulation over the medium to long term. Despite market fluctuations, the fund has maintained a steady trajectory, outperforming its benchmark indices with resilience and prudence.

Nippon India Balanced Advantage Fund – Returns Analysis

Consistent Performance: The fund’s performance over various timeframes underscores its consistency and reliability. Notably, it has outperformed the CRISIL Hybrid 50+50 – Moderate Index with an impressive 24.78% return over the past year, indicating its ability to generate alpha for investors even during challenging market conditions.

Long-Term Growth: Over longer durations, such as 5 years and since inception, the fund has delivered substantial returns, providing investors with significant wealth appreciation opportunities. For instance, since its inception on November 15, 2004, an investment of ₹10,000 has grown to ₹1,63,443, translating to a remarkable 1534.43% return, far exceeding the category average.

Nippon India Balanced Advantage Fund – Portfolio Composition

Dynamic Asset Allocation: The fund adopts a dynamic asset allocation strategy, leveraging a proprietary model based on valuations and trend following. With 67.15% invested in domestic equities, including large-cap, mid-cap, and small-cap stocks, the fund aims to capture growth opportunities across market segments while actively managing risks.

Debt Allocation: Prudent debt allocation comprising 24.08% of the portfolio, including government securities and low-risk instruments, ensures stability and income generation, enhancing overall portfolio resilience.

Sector Allocation: The portfolio encompasses diverse sectors, including banking, IT, telecommunications, and power generation, reflecting a well-diversified approach to sectoral exposure. This broad-based allocation mitigates sector-specific risks while maximising growth potential across various segments of the economy.

Top Stock Holdings: The fund’s top holdings include blue-chip companies such as ICICI Bank, HDFC Bank, and Infosys, collectively representing a significant portion of the portfolio. These stalwarts provide stability and contribute to the fund’s performance through consistent growth and dividend payouts.

Nippon India Balanced Advantage Fund – Risk Analysis

Volatility Management: Nippon India Balanced Advantage Fund exhibits lower volatility than the category average, with a standard deviation of 5.51% versus 6.29%, indicating effective risk management strategies. 

Risk-Adjusted Returns: The fund boasts superior risk-adjusted returns, as evidenced by its higher Sharpe ratio and Jensen’s alpha compared to the category average. The Sharpe ratio of 1.08 versus 0.83 for the category average and Jensen’s alpha of 2.48 versus 1.74 further validate the fund’s ability to generate excess returns per unit of risk undertaken.

Beta Analysis: With a beta lower than the category average (0.68 versus 0.75), the fund demonstrates resilience to market movements, making it an attractive option for risk-averse investors seeking stability and consistency in returns.

Disclaimer: The information provided in this article is for educational and informational purposes only. It should not be considered as investment advice or a recommendation to invest in any particular mutual fund or asset class. Past performance does not indicate future results, and investors should research and consult with a financial advisor before making investment decisions. Investing in mutual funds involves risks, including the possible loss of principal invested.

Note: Data as on June 4, 2024