Balanced Advantage Funds Raise Average Net Equity Exposure to Nearly 65%

Key Takeaways

• Average net equity exposure across 34 balanced advantage and dynamic asset allocation funds rose by 12.33 percentage points.
• Thirty of the 34 schemes in the study increased their net equity allocation between September 2024 and August 2026.
• LIC MF, Union, ICICI Prudential and HDFC were among the funds recording the largest increases in equity exposure.

Balanced advantage and dynamic asset allocation funds have raised their net equity exposure over the past two years as equity-market valuations and conditions changed.

Average net equity allocation across 34 schemes with at least a two-year track record increased to 64.98% in August 2026 from 52.65% in September 2024, data compiled from PrimeInvestor and fund-house factsheets showed.

That represents an increase of 12.33 percentage points at the category level. Thirty of the 34 schemes covered by the analysis increased their net equity exposure over the period.

The scale of the change differed considerably between funds.

LIC MF Balanced Advantage Fund recorded the largest increase at 30.72 percentage points, followed by Union Balanced Advantage Fund at 29.89 percentage points.

ICICI Prudential Balanced Advantage Fund and HDFC Balanced Advantage Fund, two of the larger schemes in the category, increased net equity exposure by 26.62 percentage points and 24.06 percentage points, respectively. Baroda BNP Paribas Balanced Advantage Fund increased its allocation by 23.78 percentage points.

Balanced advantage funds can alter their mix of equity, debt and hedged equity depending on the investment model followed by the scheme. Net equity exposure refers to the portion that remains exposed to equity-market movements after accounting for hedging through derivatives.

The category is therefore not uniform. Some schemes change allocations sharply when valuations or market conditions change, while others maintain relatively stable exposure.

That difference was also visible in returns. For the periods covered by the study, the one-year average return for the category was -3.16%, while the two-year annualised category return was 0.15%. The Nifty 500 TRI returned -6.21% over one year and -1.72% annualised over two years as of October 19, 2026. Individual schemes, however, showed a wide dispersion.

The allocation data therefore shows a broad rise in equity exposure across the category, but not a uniform investment strategy or performance outcome.