Multi-asset allocation funds | Types of Hybrid Funds

Описание: In this Investor Education original video, we’ll talk about Multi-asset allocation funds.

To check out other types of Hybrid funds, watch -
   • Balanced Hybrid funds | Types of Hybrid Funds  
   • Conservative Hybrid funds | Types of Hybri...  
   • What are Aggressive Hybrid Funds?  | Types...  
   • Balanced Advantage funds | Types of Hybrid...  

All about multi-asset allocation funds

Along with equity and debt, Multi-asset allocation funds also invest in gold & real estate. Because of multiple asset classes, these funds are perfect for diversification. Multi-asset allocation funds invest in at least 3 asset classes with a minimum allocation of at least 10% in each asset class.

Advantages of Multi Asset Allocation Funds

i) Such funds are less risky than most hybrid funds as the investments are spread across multiple asset classes

ii) You don’t have to manage your asset allocation manually. The fund manager does it for you.

Risks in multi-asset allocation funds
Multi-asset allocation funds generally give stable returns, but when markets are on a rising trend, you may not see many rallies compared to pure-play equity funds. This is because they have lesser equity exposure. These funds have been created precisely to mitigate the market risk.


Who should invest in multi-asset allocation funds?
If you think you cannot do your asset allocation by yourself, you should invest in a multi-asset allocation fund. Keep a time horizon of at least 3-5 years when investing in the same.

This fund is suitable for first-time investors. The diversification across asset classes gives you stable returns. Multi-asset allocation funds are safer than other types of hybrid funds such as aggressive hybrid funds, balanced advantage funds, or balanced funds.


Taxation in multi-asset allocation funds

Short-term capital gains are taxed as per your income tax slab rate if you sell your investments before three years. Long-term capital gains are taxed at 20% with indexation if you sell your investments after three years.

If you want to create a well-diversified portfolio with fewer risks, go for this fund.

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