All About Multi Asset Allocation Fund – Khasnis Prime Wealth

Investors often keep exploring newer options that offer more returns and help me to diversify their portfolios. One such instrument is the Multi-Asset Allocation Fund. It has gained immense popularity among the millennials due to its diverse fund allocation exposing the young investors to several asset classes. 

 

What is a Multi-Asset Allocation Fund? 

 

Simply put it is a type of mutual fund that diversifies your investible surplus into at least 3 different types of asset classes. For eg in equity, debt or gold, etc. As per SEBI guidelines, such a scheme has to invest in a minimum of 3 asset classes with a minimum fund allocation of 10% in each of them. 

 

What is the importance of a multi-asset allocation fund?

 

As these types of mutual fund schemes put your fund in different asset classes, it brings along a lot of advantages when compared to classic investments. 

 

• Since the fund allocation is done in different asset classes these offer different risk-return profiles and outperform each other at various points in time. This helps one diversify its portfolio.
• Due to the huge number of options available for investments it becomes impossible to track the outperformers consistently. Investments in multi-asset allocation funds mitigate the risk of losses to a greater extent as it is flexible and diverse in nature. 
• Because of its diversified nature, the dependence for higher returns from a single asset class reduces, making it a popular option in a volatile market.
• Multi-asset allocation funds play a major role in long-term Wealth building.

 

Why must one invest in multi-asset allocation funds?

 

• It widens the scope for portfolio diversification across different asset classes for investors.
• Since multi-asset allocation funds are a combination of different asset classes it acts as a portfolio cushion for any downturn in a particular asset class.
• Professional fund managers are better at recommending asset allocations across different asset classes as compared to individual investors. 
• Since it is difficult to track the outperformers consistently, it is often found single asset investments are detrimental for investors in the long term.

Who should invest in multi-asset allocation funds?

 

• Investors with a low-risk appetite and expecting stable returns can invest in multi-asset allocation funds.
• Investors looking forward to making wealth out of humble investments in the long term will find multi-asset allocation funds to be safe and offer them a diversified portfolio.

 

At Khasnis Prime Wealth, we leverage our expertise to research, analyze and understand what is best for our clients. We help you to choose the right mutual fund that makes your wealth creation journey a fruitful one.