SBI Dynamic Asset Allocation Fund –NFO Details, Benefits & Investment Guide

• Sushil Bajaj |
• 26 August 2025 |

During times of market volatility, investors are often uncertain whether to put more money into equity or debt. That is where Dynamic Asset Allocation Funds (DAAFs) are helpful. Through the ability to move flexibly from equity to debt and vice versa, depending upon the situation in the market, these funds balance growth along with stability.
The most recent addition to the list is the SBI Dynamic Asset Allocation Active FoF (DAAF), a coming New Fund Offer (NFO) that will endeavor to blend long-term wealth creation and risk management.

In this article, let’s discuss the features, advantages, taxation, and why one should consider investing in this new fund.

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SBI Dynamic Asset Allocation Fund (DAAF) – NFO Details

• Fund Name: SBI Dynamic Asset Allocation Active FoF (DAAF)
• NFO Period: 25th August 2025 – 8th September 2025
• Investment Allocation:
  • Equity: 35% – 100%
  • Debt & Others: 0% – 65%
• Benchmark: Nifty 50 Hybrid Composite Debt 50:50 Index
• Fund Type: Fund of Fund (FoF)

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What is a Dynamic Asset Allocation Fund?

A Dynamic Asset Allocation Fund (DAAF) is a mutual fund that actively adjusts its exposure between equity (for growth) and debt (for stability) depending on market conditions.

• In a bull market, equity exposure can increase to benefit from growth.
• During bearish/volatile markets, allocation to debt goes up to minimize downside risk.

This approach prevents investors from making emotional choices and achieves balanced returns.

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Investment Objective of SBI DAAF

• Growth Potential: Long-term compounding with equity exposure.
• Risk Management: Cushion volatility using debt allocation.
• Balanced Approach: Flexibly move between asset classes for optimal risk-return balance.

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Main Advantages of SBI Dynamic Asset Allocation Fund

✅ Automatic Asset Allocation – No need for investors to time the market.
✅ Combines Growth + Stability – Equity for wealth creation, debt for safety.
✅ Suitable for Long-Term Investors – and mainly those who are moderate-risk tolerant.
✅ Decreases Behavioral Biases – Avoids panicked buying/selling.

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Investment Allocation Structure

Asset Class	Allocation Range
Equity	35% – 100%
Debt & Others	0% – 65%

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Taxation Regulations for SBI DAAF

• Long-Term Capital Gains (Holding ≥ 2 Years): Taxed at 12.5%.
• Short-Term Capital Gains (Holding < 2 Years): Taxed as per individual income tax slab.

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Who Can Invest in SBI Dynamic Asset Allocation Fund?

This NFO is ideal for:

• Investors seeking long-term wealth creation with moderate risk.
• Individuals who desire automatic portfolio rebalancing without active monitoring of markets.
• People who are searching for a single product offering growth and stability.

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FAQs

Q1. What is the NFO period for SBI Dynamic Asset Allocation Fund?
The NFO is available from 25 August 2025 to 8 September 2025.

Q2. What is the benchmark of the fund?
The fund’s performance will be measured against the Nifty 50 Hybrid Composite Debt 50:50 TR Index.

Q3. Can this fund be categorized under short-term investments?
No. This is a fund for long-term compounding and risk-adjusted returns.

Q4. How does SBI DAAF manage risk?
The fund moves flexibly from equity to debt to minimize exposure in fluctuating markets.

Q5. What is the taxation of this fund?

• LTCG (≥2 years): 12.5%
• STCG (<2 years): As per income tax slab

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Final Takeaway

The SBI Dynamic Asset Allocation Active Fund of Funds (FoF) provides an opportunity to investors to invest in equity markets and reduce volatility through exposure to debt. It is a suitable choice for investors who desire medium to longer-term compounding with contained risk.

If you’re looking for a balanced investment option that reduces emotional decision-making, this NFO could be worth considering.

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