Dynamic Funds: Auto-Adjusting for a Stable Investment Journey

• Dynamic asset allocation funds automatically adjust equity-debt ratios based on market conditions, helping investors avoid emotional timing decisions.
• These funds use systematic frameworks (e.g., valuation metrics) to reduce equity exposure when markets are expensive and increase it when valuations are attractive.
• They aim to provide a smoother investment journey by softening market corrections and reducing the need for constant monitoring.
• While offering lower volatility, they may lag pure equity funds during strong bull markets due to their adaptive strategy.

Why It Matters: Dynamic funds manage market volatility and investor emotions through automatic rebalancing.