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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. 

Best Multi Asset Allocation Mutual Funds

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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 Manager Role: Although every mutual fund’s performance is directly linked to the crucial role played by the fund manager, in Multi-Asset Funds, their role is vital. The fund manager determines the style and type of investment and enjoys a higher autonomy to make decisions given the diversity in the fund. Thus, investors should check the fund’s track record and manager’s experience when investing.
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.

 

Popular Multi Asset Allocation Mutual Funds

  • Fund Name
  • Min SIP Investment Amt
  • AUM (Cr.)
  • 3Y Return

Quant Multi Asset Fund – Direct Growth is an Multi Asset Allocation scheme that was launched on 07-01-13 and is currently under the management of our experienced fund manager Vasav Sahgal. With an impressive AUM of ₹936 Crores, this scheme's latest NAV is ₹97.8857 as of 18-08-23.

Quant Multi Asset Fund – Direct Growth scheme has delivered a return performance of 14.7% in the last 1 year, 28.4% in the last 3 years, and an 14% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Multi Asset Allocation funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹936
  • 3Y Return
  • 14.7%

ICICI Pru Multi-Asset Fund – Direct Growth is an Multi Asset Allocation scheme that was launched on 01-01-13 and is currently under the management of our experienced fund manager Sankaran Naren. With an impressive AUM of ₹21,705 Crores, this scheme's latest NAV is ₹578.7159 as of 18-08-23.

ICICI Pru Multi-Asset Fund – Direct Growth scheme has delivered a return performance of 18.5% in the last 1 year, 26.4% in the last 3 years, and an 16.2% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Multi Asset Allocation funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹21,705
  • 3Y Return
  • 18.5%

HDFC Multi-Asset Fund – Direct Growth is an Multi Asset Allocation scheme that was launched on 01-01-13 and is currently under the management of our experienced fund manager Srinivasan Ramamurthy. With an impressive AUM of ₹1,912 Crores, this scheme's latest NAV is ₹58.834 as of 18-08-23.

HDFC Multi-Asset Fund – Direct Growth scheme has delivered a return performance of 11.3% in the last 1 year, 16% in the last 3 years, and an 11.1% since its launch. With a minimum SIP investment of just ₹100, this scheme offers a great investment opportunity for those looking to invest in Multi Asset Allocation funds.

  • Min SIP Investment Amt
  • ₹100
  • AUM (Cr.)
  • ₹1,912
  • 3Y Return
  • 11.3%

Tata Multi Asset Opportunities Fund – Dir Growth is an Multi Asset Allocation scheme that was launched on 04-03-20 and is currently under the management of our experienced fund manager RahulSingh. With an impressive AUM of ₹1,756 Crores, this scheme's latest NAV is ₹18.8029 as of 18-08-23.

Tata Multi Asset Opportunities Fund – Dir Growth scheme has delivered a return performance of 13.5% in the last 1 year, 19.5% in the last 3 years, and an 20% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Multi Asset Allocation funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹1,756
  • 3Y Return
  • 13.5%

Edelweiss Multi Asset Allocation Fund – Dir Growth is an Multi Asset Allocation scheme that was launched on 23-06-23 and is currently under the management of our experienced fund manager Bhavesh Jain. With an impressive AUM of ₹248 Crores, this scheme's latest NAV is ₹10.1104 as of 18-08-23.

Edelweiss Multi Asset Allocation Fund – Dir Growth scheme has delivered a return performance of -% in the last 1 year, -% in the last 3 years, and an 1.1% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Multi Asset Allocation funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹248
  • 3Y Return
  • -%

HDFC Dynamic PE Ratio Fund of Funds – Dir Growth is an FoFs Domestic scheme that was launched on 01-01-13 and is currently under the management of our experienced fund manager Srinivasan Ramamurthy. With an impressive AUM of ₹36 Crores, this scheme's latest NAV is ₹34.7204 as of 18-08-23.

HDFC Dynamic PE Ratio Fund of Funds – Dir Growth scheme has delivered a return performance of 17.3% in the last 1 year, 18.7% in the last 3 years, and an 11.5% since its launch. With a minimum SIP investment of just ₹100, this scheme offers a great investment opportunity for those looking to invest in FoFs Domestic funds.

  • Min SIP Investment Amt
  • ₹100
  • AUM (Cr.)
  • ₹36
  • 3Y Return
  • 17.3%

SBI Multi Asset Allocation Fund – Direct Growth is an Multi Asset Allocation scheme that was launched on 19-03-13 and is currently under the management of our experienced fund manager Dinesh Balachandran. With an impressive AUM of ₹1,246 Crores, this scheme's latest NAV is ₹47.5467 as of 18-08-23.

SBI Multi Asset Allocation Fund – Direct Growth scheme has delivered a return performance of 14.7% in the last 1 year, 13% in the last 3 years, and an 11.3% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Multi Asset Allocation funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹1,246
  • 3Y Return
  • 14.7%

UTI-Multi Asset Fund – Direct Growth is an Multi Asset Allocation scheme that was launched on 01-01-13 and is currently under the management of our experienced fund manager Sharwan Kumar Goyal. With an impressive AUM of ₹858 Crores, this scheme's latest NAV is ₹55.3408 as of 18-08-23.

UTI-Multi Asset Fund – Direct Growth scheme has delivered a return performance of 14% in the last 1 year, 12.7% in the last 3 years, and an 8.3% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Multi Asset Allocation funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹858
  • 3Y Return
  • 14%

Quantum Multi Asset Fund of Funds – Direct Growth is an FoFs Domestic scheme that was launched on 11-07-12 and is currently under the management of our experienced fund manager Chirag Mehta. With an impressive AUM of ₹53 Crores, this scheme's latest NAV is ₹26.7345 as of 18-08-23.

Quantum Multi Asset Fund of Funds – Direct Growth scheme has delivered a return performance of 8.4% in the last 1 year, 8.9% in the last 3 years, and an 9.3% since its launch. With a minimum SIP investment of just ₹500, this scheme offers a great investment opportunity for those looking to invest in FoFs Domestic funds.

  • Min SIP Investment Amt
  • ₹500
  • AUM (Cr.)
  • ₹53
  • 3Y Return
  • 8.4%

Edelweiss Multi Asset Allocation Fund – Dir Growth is an Multi Asset Allocation scheme that was launched on 23-06-23 and is currently under the management of our experienced fund manager Bhavesh Jain. With an impressive AUM of ₹248 Crores, this scheme's latest NAV is ₹10.1104 as of 18-08-23.

Edelweiss Multi Asset Allocation Fund – Dir Growth scheme has delivered a return performance of -% in the last 1 year, -% in the last 3 years, and an 1.1% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Multi Asset Allocation funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹248
  • 3Y Return
  • -%

Frequently Asked Questions

How long should I stay invested in a Multi-Asset Allocation mutual fund?

Multi-Asset Allocation Funds keep changing their asset allocation per specific rules and market conditions to give optimal returns to their investors. Due to this, it is ideal for holding onto a Multi-Asset Allocation mutual fund for at least 5 years, with the longer horizon improving the chances of generating a higher return.

What kind of returns can I expect from a Multi-Asset Allocation Fund?

On average, Multi-Asset Allocation Funds have given investors an average return of 10.63% in the last 5 years and 8.84% annualized annual returns in the previous 10 years. 

Who should invest in Multi-Asset Allocation Funds?

Investors looking for alternatives to a fixed income or those who want to gain marginally better returns with a lower risk appetite can invest in multi-asset allocation funds. Since the fund doesn’t invest in any particular asset class or instrument, it is ideal for beginners and those who do not have much financial knowledge.

What are the benchmark uses for multi-asset funds?

There are no fixed expense ratios that mutual fund houses must abide by when investing in multi-asset allocation funds, and fund managers can fix an allocation for each index per their investment goal. 

Where do Multi-Asset Allocation Funds invest in?

Multi-Asset Funds do not invest in any particular industry, asset class, or segment. The allocation percentage for each fund is determined by the fund’s objective and the strategy adopted by the fund manager. 

How does Multi-Asset Fund reduce volatility?

Since Multi-Asset Allocation Funds invest in different asset classes, any volatility or hit to a particular asset class is not felt by the overall fund. This helps the overall returns to be consistent despite market fluctuations and allows investors to get relatively reduced volatility. 

What is a high expense ratio for a multi-asset fund?

A fund with an expense ratio of greater than 1% – 2% is considered high for multi-asset allocation funds, and investors should compare the expense ratio when planning their investments.

How to invest in multi-asset allocation funds?

Investing in Multi-Asset Allocation Funds is very easy using the 5paisa app. Here are the steps you need to follow – Download the 5paisa app or log in using the website, head to the mutual fund section and choose ‘Multi-Asset Allocation Funds.’ Once selected, you can get a list of funds to invest in. You can choose SIP or Lumpsum and complete your KYC registration to complete your investment. 

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