Multi Assets Fund are hybrid funds that invest across different asset classes. The portfolio of multi asset funds include equity, gold and fixed income securities.
Thus, multi asset funds diversify your portfolio by including multiple asset classes into a single asset class.
In multi asset funds, investments are switched from one asset class to another depending on prevailing market situations.
So, profits are booked depending on the rally in the market and hence may generate superior returns from the overall portfolio.
All investors typically face a challenge in choosing the right mix of assets in building a credible investment portfolio to get optimum returns.
So, multi asset funds provide a relief to those investors who find it difficult to strike the right balance of risk and returns while diversifying their assets.
Benefits of multi asset funds
The benefits of multi asset funds include:
1. Reduces risk: As the fund spreads over multiple asset classes it reduces the risk associated with a single asset classes.
2. A ready-made fund: Multi asset funds are ready-made funds and beneficial for naïve investors who have little exposure to different asset classes and hence can not diversify their portfolio on their own.
3. Fund manager expertise: The expertise of fund managers are available who churn the portfolio depending on market conditions.
4. Benefits in a single fund: Without actually holding multiple asset classes investors get the benefit of multiple asset in a single fund.
Multi asset fund options currently available
Multi asset funds currently available in the market include Morgan Stanley Multi Asset Fund, Quantum Multi Asset Fund (G), IDFC Asset Alloc-cons-Reg, Birla SL Asset Alloc-Mod, Tata Young Citizens Fund, Kotak Multi Asset allocation Fund etc.
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So, if you are a risk averse investor and find it difficult to to choose the right multiple asset classes then you can invest in multi asset funds.
These fund suits people who have low to medium risk appetite. They prove beneficial for long term as they make use of both the high and low of economic cycles.
However, an investor should also look at the fund manager's expertise, track record and the reputation of the fund house before investing.