Dynamic Asset Allocation Fund
08 Nov 2021

Dynamic Asset Allocation Fund

A guide on what is dynamic asset allocation fund and its features.

Key Takeaways

  • Dynamic Asset Allocation Funds are essentially like Balanced or Hybrid Funds.
  • You can invest across various sectors with Dynamic Asset Allocation funds and benefit from diversification and risk mitigation.
  • These funds provide assured returns and are a good choice during volatile market conditions.
  • During difficult market conditions, funds can be transferred from one investment to another for security.
  • The diversification virtue of this investment can also help with taxation.

As the old saying goes, it is unwise to put all your eggs in one basket. The same applies to your investment strategies, as well. When you invest in the securities market, you should ensure that you take the necessary measures to protect your investments from inherent risks like volatility and fluctuations. Strategic asset allocation is a critical part of stock market investments. One way to protect your investments is to invest in Dynamic Asset Allocation Funds. Learn more about this investment vehicle in this article.

What are Dynamic Asset Allocation Funds?

Dynamic Asset Allocation Funds are a kind of Balanced Fund or Hybrid Fund. The mutual funds in this category usually invest across different sectors, including equity funds, stocks and bonds, and real estate.

These funds are managed by professional fund managers who strategically and patiently ensure that the quality of investments does not deteriorate. Thus, with diversification and expert management, these funds are a recourse for investors during difficult times like a recession on the bear economy. If you are unsure of investing all your funds in one instrument or mutual fund scheme, then a Dynamic Asset Allocation Fund can help you earn returns.

How Dynamic Asset Allocation Funds Work

Dynamic Asset Allocation Funds are designed to sustain in uncertain market conditions. Since the investments are spread out over sectors, this dynamic mechanism is more suitable than static. Essentially, when an investment vehicle is not functioning as it should, the liquidity is shifted to another investment vessel that is performing appropriately. This dynamism, based on market conditions, is the primary advantage of the fund. This balanced advantage fund is suitable for you if you are looking for assured returns upon maturity. It also works for you if you have limited funds and want to invest across multiple sectors. However, keep in mind that while investment in equities may offer higher returns, they also carry higher risks.

Features and Benefits of Dynamic Asset Allocation Funds


It is an investment instrument that can stand firm against the bearish pull of a market. Plus, the diversified nature reduces the prospects of booking a loss at the end of the tenure.


The taxation on such Mutual Funds is considerably relaxed. Since the investments are spread across so many sectors, you can look for income tax exemptions wherever applicable. However, Dynamic Asset Allocation Funds are subject to Long Term Capital Gains tax.


If you have invested in Dynamic Asset Allocation Funds, you can diversify your portfolio. Plus, managing your portfolio becomes a lot easier when the fund is consolidated as it is through fund asset allocation.


You can enjoy more dependable returns with Dynamic Asset Allocation Funds than you would through other mutual fund investments, especially over the long term.


So, consider investing in dynamic Asset Allocation Funds. You can rely on DBS Bank's internet banking services and app to invest across various instruments and the best Dynamic Asset Allocation Funds.

Download the digibank app by DBS Bank and start investing in minutes. Also, open your savings account with us.

*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.