SBI MF mobilises Rs 12,000 crore in highest ever NFO

SBI MF had introduced a unique percentage withdrawal feature to provide a steady stream of cash to investors, Mint reported. It means investors can withdraw 0.5 percent of the invested amount every month, three percent every six months, and six percent every year. However, if the investors withdraw this amount, the fund would not deliver returns above these rates. And the withdrawals would come from the investors' capital.

SBI MF is a Balanced Advantage Fund (BAF), called SBI Balanced Advantage. It is an open-ended dynamic asset allocation (DAA) fund created after SEBI's new categorisation rules. Per these rules, BAF can modify its allocation to debt and equity according to market conditions. And since it is open-ended, investors can subscribe to it later as well.

BAF/DAA has the potential to navigate volatile markets through debt and cash exposure while holding enough equity during good times to do better than fixed-income alternatives. Such funds do not just invest in equity, they hedge through equity through derivatives and debt.

SBI Balanced Advantage will use parameters such as the breadth of the market, retail participation, primary market activities, mutual fund flows, valuations, and earnings drivers to decide the levels of debt, derivatives, and unhedged equity.