Is capital protection possible in dynamic asset allocation funds

Yes, for 3 years investment horizon, dynamic asset allocation funds may give better return than debt funds. However, capital protection is not possible in dynamic asset allocation funds. in fact, for that matter, capital protection is not possible in any of the mutual fund categories. For capital protection, there is another category of fund, popularly known as 'Capital protection funds'

Therefore, you will have to take a bit of risk if investing in dynamic asset allocation funds in order to get better returns. Please also note that dynamic asset allocation funds are hybrid debt oriented funds and suitable for investors with moderate risk profile.

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