JioBlackRock Mutual Fund has launched JioBlackRock Balanced Advantage Fund, which is open for subscription and will close on September 25.The balanced advantage fund is an open-ended dynamic asset allocation fund that seeks to generate long-term capital appreciation with income generation by investing in a dynamically managed portfolio of equity and debt instruments.The fund is designed to address one of the most persistent challenges faced by investors: determining when to increase market exposure and when to become more cautious. By dynamically managing allocations between equity and debt and employing a disciplined, data-driven investment approach, the fund seeks to help investors participate in long-term market opportunities while navigating changing market conditions.Also Read |August AMFI Data: Equity mutual fund inflows rise 19% MoM to Rs 29,328 cr; smallcap inflows hit Rs 7,973 cr What did the fund house say on launchSid Swaminathan, Managing Director & Chief Executive Officer: The launch of the JioBlackRock Balanced Advantage Fund reflects our commitment to bringing innovative, technology-enabled investment solutions to investors. For many investors, the biggest challenge is not choosing where to invest, but deciding when to invest, when to stay invested and how to navigate periods of market uncertainty. As markets move through cycles, they often test both conviction and discipline. This fund helps simplify that journey with a dynamic, data-driven approach that adjusts to changing market conditions.Rishi Kohli, Chief Investment Officer: Markets rarely move in straight lines. A dynamic asset allocation strategy seeks to adapt to market conditions by adjusting exposures across equity and debt combined with systematic active stock selection. The JioBlackRock Balanced Advantage Fund seeks to leverage diversified research inputs, systematic portfolio construction and risk management capabilities to build a portfolio that can evolve with changing market environments.Experts weigh inExperts typically ask investors to avoid investing in NFOs unless they offer something unique. The uniqueness could be that the scheme is offering an investment option that is not available in the market or offering something extra to an existing option. Otherwise, the experts believe investors are better off with an existing scheme with a long performance record. This is because you have some historical data to base your investment decision. You don’t have any data when it comes to new offerings.Vishal Dhawan, Founder & CEO, Plan Ahead Wealth Advisors shared with ETMutualFunds that the JioBlackRock Balanced Advantage Fund invests 65% to 90% in equity and equity-related instruments, 10% to 35% in debt and money market instruments and to maintain equity tax treatment, gross equity holdings remain at or above 65%, while using derivative hedges adjusts net equity exposure without selling the underlying stocks.Stock selection and fixed income are typically managed through data signals and risk modelling, during market rallies, higher net equity exposure can allow participation in market gains and during market corrections, derivative hedges reduce net stock exposure, whilst fixed-income holdings can cushion drawdowns to limit losses compared to pure equity schemes, Dhawan further said.Shivam Pathak, CFP and Founder of Asset Elixir told ETMutualFunds that the fund uses a dynamic asset-allocation approach based on valuations, market trends and economic indicators. It can increase equity exposure when opportunities improve and reduce it when risks rise, helping manage volatility. However, it does not eliminate market risk.Investment strategyThe scheme combines three key investment capabilities: a dynamic asset allocation framework that adjusts exposures based on multiple market indicators, a systematic equity portfolio construction process, and a disciplined fixed income strategy. The fund may also use derivatives, as permitted under applicable regulations and the Scheme Information Document, to manage market exposure and maintain equity-oriented taxation.Also Read |Smallcap, midcap funds attract higher inflows in August; largecap outflows continue for second monthThe fund will allocate 65-90% in equity and equity-related instruments and 10-35% in debt and money market instruments.Are current valuations right for Balanced Advantage Funds?Pathak said with valuations looking elevated in some parts of the market, Balanced Advantage Funds can be useful for investors seeking equity exposure with relatively lower volatility and an allocation of around 10-20% of the overall portfolio can be considered based on the investor's risk profile and existing equity exposure.Dhawan said in times like this, when market valuations are elevated or uncertain, dynamic asset allocation provides a systematic framework to manage risk without needing to time market entries or exits and the allocation process lowers net equity exposure when stocks look expensive and raises it when valuations become attractive.As a core holding, moderate-risk investors may allocate 15% of their total mutual fund portfolio to a balanced advantage fund and conservative investors may allocate 20% to 30% while aggressive growth investors can cap allocation at 10%, he further said.Outflows from the categoryAccording to the latest monthly data declared by Association of Mutual Funds in India (AMFI), balanced advantage funds saw an outflow of Rs 227 crore. In July the category saw an outflow of Rs 252 crore after seeing inflows for three consecutive months; before July, the last outflow was in March 2026 and before that it was in June 2023.So with the category witnessing outflows for two consecutive months, how should investors see this trend?Dhawan said that outflows in July and August can be seen as profit-booking by the investors following market gains and as broader equity indices move higher, investors often exit hybrid funds to harvest the profits or move their capital into high-beta equity funds to chase short-term market momentum.Because balanced advantage funds use derivative hedging to control downside risk, their performance can trail pure equity funds during steep market surges and these outflows reflect short-term category rotation and profit harvesting rather than a change in the long-term rationale for dynamic asset allocation, Dhawan further said.Pathak said that the recent changes in BAF flows should not be treated as a signal to enter or exit the category, investors may book profits or rebalance their portfolios depending on market conditions and the focus should be on how well the fund manages its allocation across different market cycles.Also Read | Parag Parikh Flexi Cap Fund increase stake in HDFC Bank, Coal India, and 8 others in AugustSuitabilityThe fund will be suitable for investors seeking long-term capital appreciation with income generation and investment in a dynamically managed portfolio of equity and debt instruments. The principal invested in the fund will be at “very high risk” according to the riskometer of the scheme whereas the principal invested in the benchmark will be at “high risk”, according to the riskometer.Balanced advantage funds invest in a mix of stocks, debt, and arbitrage opportunities. These funds decide their equity exposure depending on key market ratios or in-house parameters. They invest less in stocks when the market is very high or valuations are stretched. They invest more in equity when stocks are available at attractive valuations. In short, BAFs do the job of juggling equity exposure for investors.One should invest in balanced advantage funds only if you can tolerate the risk of investing in stocks and also, invest only if you have an investment horizon of at least five years.Balanced advantage funds: Outlook and investment strategyCommenting on the outlook for these funds and what investment strategy one should follow, Pathak said that the category can be suitable for investors looking for long-term growth with better volatility management. However, as this is a new fund, investors should not invest only because of the brand or NFO and a staggered approach through SIPs or STPs can be considered, while the fund's performance and asset-allocation decisions should be evaluated over time.Dhawan said that balanced advantage funds remain a practical option for managing portfolio volatility across full market cycles. While they lag pure equity funds during sharp bull markets, they cushion drawdowns during downturns to deliver steady risk-adjusted returns.He further said that investors should approach these funds with a medium to long term horizon and rather than deploying large lump sums during an NFO, staggering investments through systematic investment plans or systematic transfer plans helps average out entry costs whilst new schemes build an operational track record. Since this category has a large number of schemes already, lumpsums could be deployed in schemes with a good longer-term track record.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message ET Mutual Funds on Facebook/Twitter. We will get them answered by our panel of experts. Do share your questions at ETMFqueries@timesinternet.in along with your age, risk profile, and Twitter handle.