Can I invest in BSL Balanced Advantage Fund

At the outset, I thank you for the kind words about Advisorkhoj.

Please note that BSL Balanced Advantage Fund is a hybrid asset allocation fund which has monthly dividend payout option. The fund is paying monthly dividend since January 2017 and the current monthly dividend yield is around 0.52%. Based on this and also on the assumption that the fund continues paying monthly dividends in future as well, you can expect annual dividend yield of around 6.25%. This yield may increase if the fund pays more amount of dividends in the coming months. You may check the historical dividend of this fund from here https://www.advisorkhoj.com/mutual-funds...

Please note that mutual funds do not pay interest but do pay dividends. And also that, the dividends paid by mutual funds are not assured, neither the frequency of the dividend nor the amount. Therefore, you should not compare dividends with interest as interest is always assured. However, the mutual fund dividends received in your hand are tax free whereas interest is taxable.

Your advisor's contention that the fund may give some appreciation in future is correct provided the markets are good and you remain invested in the fund for at least for 3 years or more.

In the long run, you can expect return of 10-11% from a good fund from this category i.e. hybrid asset allocation. Historically, this category has given around 13%, 12% and 14% average returns in the last 1,3 and 5 years period respectively. BSL Balanced Advantage Fund has beaten the category returns in all these periods by generating returns of 15.88%, 13.25% and 14.80% respectively in the last 1,3 and 5 years period. Therefore, it is a good fund.

If your risk profile is moderate, you can invest in this fund with minimum investment horizon of 3 years.

Thanks for writing to Advisorkhoj.