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With increasing quality of life, more and more people are coming forward to invest their hard-earned money though mutual funds. And mutual funds investment plans have evolved to meet to meet their diverse investors, one such mutual fund type is dynamic mutual funds.


What is dynamic mutual fund?

Mutual fund which has fund allocation call across debt,equity and arbitrage oppurtunities. But with more exposure to equity with a minimum 65%. The rest of the exposure is taken in debt investments to keep the volatility in check and generate regular income.

How is the fund managed ?

The fund tries to generate profits by active management, stock selection and sector rotation.

I.e., the as the name suggests, the fund is under constantly changed from one stock to another by analyzing the market growth in order to increase the investors profit.

How much returns will I get on average in dynamic funds?

Returns from dynamic mutual funds can range from 10 to 15%, depending on the performance of the equity markets and the rebalancing calls taken by the fund manager.

What is the difference between balanced fund and dynamic fund?

A balanced fund also consists of a mix of equity and debt but in that case the proportion is normally 65% in equity and 35% in debt. Dynamic funds, on the other hand, can even go up to 100% in equity or 100% in debt as the case may be.

What type of investors can benefit maximum from dynamic mutual fund?

investors who are trying to build their equity exposure for their long-term goals are better off investing in diversified equity-oriented schemes. However, people looking to invest lumpsum money with an intention to generate better returns than plain debt investments may allocate money in these funds.

What is the advantage of investing in dynamic mutual fund?

dynamic mutual funds have an advantage over balanced funds because they can shift between asset classes without restrictions, but is subject to the mandate of the fund.The advantage of investing in a dynamic fund is that you can play the market cycle more effectively.

What are the disadvantages of dynamic mutual funds?

The performance of any fund depends on the fund manager but this is truer in the case of dynamic funds because it gives the fund manager the liberty to choose their asset weightages.

dynamic funds are treated as equity investments only if their equity portion is 65% and above. If it goes below that, the gains made from the fund will be taxed as per the tax slab applicable for debt funds.

Is dynamic mutual funds suitable for you?

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