Know all about Multi Asset Allocation fund category.
3 Asset 1 One Fund
If you Need Diversified Fund,One Fund and multiple asset class like Equity, Debt, Gold or Real Estate that is Multi Asset Allocation Fund
It enables the investors to invest across asset classes (Equity, Fixed Income, Gold/Silver, REIT/INvit, International Equity) to help build a diversified portfolio with the ability to generate capital appreciation over a long term horizon. Multi Asset Allocation Funds invest at least 10% of their portfolio in three distinct asset classes.
Why multi asset allocation fund?
Different asset classes offer different potential advantages and levels of risk depending on the economic cycle. While equity as an asset class may offer growth during bull markets, debt can be a more attractive option during interest rate hikes, while commodities like gold and silver can serve as a hedge against inflation. Multi-asset allocation scheme is a type of hybrid scheme offered by mutual funds, which carries the advantage of offering investors a variety of asset classes in a single fund.
What is Multi Asset Allocation Mutual Fund?
Multi Asset Allocation Funds are hybrid funds that must invest a minimum of 10% in at least 3 asset classes. These funds typically have a combination of equity, debt, and one more asset class like gold, real estate, etc.
Advantages of Multi Asset Allocation Funds
- Lesser risk than most hybrid funds as the investments are spread across multiple asset classes
- You get exposure to a well-diversified portfolio.
- Multi-asset allocation funds are known to offer steady returns over time.
Risk Associated With Multi Asset Allocation Funds
The risk levels associated with a multi-asset allocation fund are on the lower side. This is because the portfolio of these funds is constituted in such a way that the fund invests at least 10% in a minimum of three different asset classes. This mitigates the risk of concentration to a greater extent and gives you the benefit of exposure to a diversified portfolio.
Who Should Invest in Multi Asset Allocation Funds?
Investing in multi-asset allocation mutual funds is suitable for those investors who are not willing to assume higher levels of risk and are looking to earn stable and consistent returns on their investments.
How long should I stay invested in Multi Asset Allocation Mutual Funds?
These funds are ideal for an investment horizon of at least 5 years.
What kind of returns can I earn from Multi Asset Allocation ?
Multi Asset Allocation Funds have on an average delivered 14.0% p.a. returns in the last 5 years. Their 3 and 10 year annualized returns are 17.14% and 12.85% p.a.
Summary
If you are looking at options to diversify your portfolio, then investing in a multi-asset allocation fund is apt for you.
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Disclaimers:
An investor education initiative By Findola Wealth Research Team.
This article is generated and published by Findola Wealth Research Team.
Investment in securities market are subject to market risks, read all the related documents carefully before investing.
This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision in the above-mentioned schemes.
