Archive · 19 Sep 2026
Model-Driven Fund Adjusts Equity Exposure Across Market Cycles
This fund invests money in both shares and bonds.
A computer-based model helps decide how much money should go into each type of investment.
When shares look cheap and investors are worried, the fund usually buys more shares.
When shares look expensive and investors are very confident, it reduces its share exposure.
The model examines four things, including share prices, dividend payments and bond yields.
The fund currently has about 81% of its investments exposed to shares.
It also uses arbitrage and bonds to reduce some ups and downs.
The fund has earned better average returns than the typical fund in its category over several periods.
The article says it may suit investors who can invest for at least three years and accept moderate risk.
Baroda BNP Paribas Balanced Advantage Fund has delivered a 13% compounded annualised return since its November 2018 launch.
Its four-factor model adjusts net equity exposure from roughly 40% to 90% based on valuations and equity-versus-debt attractiveness.
The fund’s net equity exposure rose to about 87% after the 2020 Covid-19 sell-off and fell to 41-42% by December 2023.
The model currently indicates approximately 81% net equity exposure, while about one-third of the equity portfolio is invested in mid- and small-cap stocks.
The fund’s five-year rolling returns averaged 14%, compared with 11% for its category, while its regular-plan expense ratio is 1.59%.
- Who
- Baroda BNP Paribas Balanced Advantage Fund and its fund-management team.
- What
- An analysis of the fund’s model-driven asset allocation, investments, risk management and performance.
- When
- The fund was launched in November 2018; the analysis was published on September 19, 2026, and cites holdings as of August 2026.
- Where
- The fund invests across equity, debt, arbitrage and InvITs; the article does not identify a specific geographic location for the fund’s operations.
- Why
- To adjust equity exposure according to market valuations and the relative attractiveness of equity versus debt while seeking to limit volatility.
- Fund launch
- November 2018
- Annualised return since launch
- 13%
- Current net equity exposure
- Approximately 81%
- Model factors
- P/E, P/B, dividend yield, and the earnings-yield gap versus sovereign yields
- Five-year rolling returns
- 14% average, compared with 11% for the category
- Regular-plan expense ratio
- 1.59%, compared with a 1.7% category average
- Recommended investment horizon
- Three years or more