I got this attachment on the mail.
It says the MF is taxed similar to “Other Than Equity Oriented Funds”.
Aren’t all Balanced Advantage Funds(BAF) also called Dynamic Asset Allocation Funds taxed similarly i.e. Equity MF like with >65% in equity ?
Can someone explain this ? @rupeshmandal @ShubhS9 @Neelesh @Bhuvan
The taxation of the fund depends on the equity allocation in the fund rather than the fund category (BAF, DAAF etc.)
Below are the three taxation brackets as of right now.
| Equity Allocation | Taxation |
|---|---|
| < 35% | As per your tax slab |
| between 35% to 65% | STCG - As per your tax slab, LTCG (3+ years) - 20% with indexation benefits |
| > 65% | STCG - 15%, LTCG (1+ years) - 10% |
According to PPFAS the risk/return profile of this fund will be similar to that of their Conservative Hybrid (PPCHF) fund. (Reference - Link). This fund is being introduced as the PPCHF fund lost its indexation benefits after the debt taxation changes last year. This DAAF fund will supposedly have the equity allocation closer to 35% to get indexation benefits.
On a similar note, how is HDFC Balanced Advantage Fund is taxed ?
How is HDFC BAF able to generate 17% CAGR over 10 years and have a huge AUM of 77000 crore ?
It is an equity fund, taxed like equity
Two parts to this. 17% CAGR was not generated 77K cr AUM. 10 years back, fund had like 5K cr AUM.
Frankly, there is no point comparing historical returns with today’s AUM
Just checked the returns over the last 5 years.
We can say that last 3 years data might not paint the whole picture due to Covid’s fall around Mar’20.
But the 4 year & 5 year returns are looking very good.
Is there a way to find out the AUM growth year-wise ?
I agree that more equity exposure can give superior returns in the BAF category. But the consistency seems remarkable. Let me know if you have any points to support/refute this.
Umm, yeah go to fund website and lookup historic factsheet for fund, that should contain the details.
Only challenge would be this fund has changed name couple of times. It is being called BAF only for few years, before that it was called something else, and before that something else 
So digging out data would be challenge.
Forget mutual fund. Do Direct option trading bro
Any idea when will this mutual fund be available for margin/pledging?
Currently it not available in the list of stocks and mutual funds that can be pledged with Zerodha for margins and the applicable haircut % found in this list (DOC).
Depends on the Clearing Corporation, they do the analysis at there end and then allow a scheme.
SBI Conservative Hybrid Direct Growth Fund has been around for ages and is still not approved, i wonder what’s the criteria for them or did they just forget lol
Will check with the Clearing Corp and get back.