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Multi Asset Allocation Mutual Funds
Multi-Asset Allocation Mutual Funds are balanced funds that invest at least 10% of their portfolio in three or more asset classes as per the SEBI guidelines. The fund can invest in a diverse range of assets and securities in the equity and debt market, including gold, real estate, commodities, bonds, stocks, gold, international equities, etc. This wide range of investment options provides investors the benefit of exposure to a diversified portfolio and a lower risk from volatility in any asset class. View More
The distribution and allocation of assets in a Multi-Asset Fund can vary, and it is up to the fund manager how the allocation and investment are to be planned. As per SEBI guidelines, the Multi-Asset Allocation Fund has to have at least 10% of its portfolio in three or more asset classes, while there are no restrictions on which assets or allocations the fund manager has to follow. These funds follow the principles of ‘Do not put all your eggs in one basket,’ allowing investors to enter multiple asset classes and get performance benefits at different times.
Multi-Asset Funds allow the fund managers to play an instrumental role since they get higher flexibility to allocate funds as per market conditions and their analysis. For instance, if the stock market is volatile, the fund manager can give a higher allocation towards debt, gold, or safer instruments to ensure no adverse effects on the fund’s returns. Meanwhile, when the market is experiencing a bull run, the fund manager can increase exposure to equity-linked schemes and make the best of both situations.
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List of Multi Asset Allocation Mutual Funds
Category
Sub Category
- Aggressive Hybrid
- Arbitrage
- Balanced Hybrid
- Banking and PSU
- Childrens
- Conservative Hybrid
- Contra
- Corporate Bond
- Credit Risk
- Dividend Yield
- Dynamic Asset
- Dynamic Bond
- ELSS
- Equity Savings
- Fixed Maturity Plans
- Flexi Cap
- Floater
- Focused
- FoFs Domestic
- FoFs Overseas
- Gilt Fund with 10 year
- Gilt
- Index Funds
- Large & Mid Cap
- Large Cap Funds
- Liquid
- Long Duration
- Low Duration
- Medium Duration
- Medium to Long Duration
- Mid Cap
- Money Market
- Multi Asset Allocation
- Multi Cap Funds
- Overnight
- Passive ELSS
- Retirement
- Sectoral / Thematic
- Short Duration
- Small Cap
- Ultra Short Duration
- Value
Rating
| Fund Name | Fund Size (Cr.) | 3Y Returns | 5Y Returns | Invest Now |
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| Fund Name | 1Y Returns | Rating | Fund Size (Cr.) |
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Who Should Invest in Multi-Asset Allocation Mutual Funds?
Investing in a Multi-Asset Allocation Mutual Fund is ideal for investors who do not want a higher risk and want to earn stable returns by diversifying their investment in multiple financial instruments. Also, the fund is excellent for long-term holding or a long investment horizon, i.e., above five years at least. View More
Depending on the risk and the investment goal, investors can choose a Multi-Asset fund that is heavily focused on debt and equity. An equity-linked multi-asset scheme is ideal for long-term gains but with a relatively higher risk. For those wanting stable returns, the debt-oriented scheme is the perfect option.
Features of Multi-Asset Allocation Mutual Funds
Some features of Multi Asset Allocation Funds include:
Portfolio Diversification: As per SEBI guidelines, Multi-Asset Allocation Funds should invest a minimum of 10% in three or more asset classes. It ensures that the investor gets exposure to different assets by investing in a single scheme, and there are no other regulations to define how this diversification can be done. Thus, investors need to go through the scheme-related documents carefully and plan their investment based on the investment goals declared by the fund. View More
Fund Returns: Multi-Asset Funds of not promise or guarantee any returns to the investor, and even if the fund is focused on debt investment, the fund is susceptible to market conditions. So investors must plan and invest in these funds by planning their investment accordingly.
Taxability of Multi-Asset Allocation Funds
Multi-Asset Allocation Funds follow different equity exposure, so the tax incurred on the returns generated by these funds varies. As per the amendments to the 2020 Budget, investors are taxed depending on the type of scheme that they have invested in. Thus, if the equity exposure is more than 65%, the scheme is taxed like any other equity-oriented fund. Meanwhile, if it is lower, it will incur taxes similar to a debt fund. View More
| Fund Type | Short Term Capital Gains Tax | Long Term Capital Gains Tax |
| Equity-linked Scheme | Holding Period: less than 12 months
Tax Incurred: 15% irrespective of income tax slab |
Holding Period: more than 1 year
Tax Incurred: Tax-free up to INR 1 lakh. Anything above INR 1 lakh is taxed at 10% |
| Debt-linked Scheme | Holding Period: less than 36 months
Tax Incurred: Added to your overall income and taxed as per the income slab that you fit in |
Holding Period: more than 36 months
Tax Incurred: 20% with indexation |
Risk Involved in Multi-Asset Allocation Funds
Since Multi-Asset Allocation Funds can range from equity-oriented to debt-oriented, their risk can also vary. In either case, Multi-Asset Funds have a lower risk appetite since the funds are not concentrated on any particular asset or instrument. This mitigates the risk associated, and the fund can even sustain and give wholesome returns despite the market, volatility, and concentration risks. View More
The debt fund has a much lower risk threshold, while the equity-focused multi-asset fund can have a higher risk but carries much less risk than any other equity fund.
Advantages of Multi-Asset Allocation Funds
Some of the major benefits of investing in Multi-Asset Allocation Funds include: View More
Higher Diversification: Since your portfolio can be invested in multiple asset classes, you get the benefit of lower risk and earning steady returns from different market cycles
Rebalancing Portfolio: Investors must rebalance their portfolio per market conditions and investment goals. With multi-asset allocation, investors do not have to redistribute or rebalance their portfolio, as it is done by the fund managers and the mutual fund house
Tailor-made Portfolio: Multi-Asset Allocation Mutual Funds invest in diverse market instruments and assets based on industry research, market conditions, and constant market monitoring. It enables investors to get a ready-made portfolio that invests in multiple assets and has it well-balanced to ensure optimal returns.
Unrestrained entry/exit load: The Multi-Asset Allocation Fund allows investors to enter and exit without any charge to the investor. The investor can even redeem 10% of their investment before a year has passed. No exit load is levied if the fund is sold after a year. Even though the fund has not been through a complete market cycle, these funds have given investors good returns and are ideal for both long-term and short-term holding.
Who Are These Funds Suited For?
Multi-asset allocation mutual funds are ideal for investors who want to diversify their portfolio and do not want to assume a higher level of risk by investing their funds in a particular asset class. The diversified portfolio of a multi-allocation fund offers capital gains in the long run while minimizing associated risk. View More
Additionally, multi-asset allocation funds are ideal for investors who expect a stead flow of income while some asset classes are volatile or underperforming.