Choosing the right asset class to invest in can be challenging. However, Multi Asset Allocation Funds can provide a solution. They typically invest in equity, debt, and gold-related instruments, including Exchange Traded Funds (ETFs) for equity, debt, and gold. Compared to traditional hybrid funds that combine equity and debt, Multi Asset Allocation Funds offer better portfolio diversification. Different asset classes are less likely to move in the same direction simultaneously, by including asset classes with lower correlations to traditional ones, these funds aim to reduce risk.
Invest in Equity, Fixed Income & Gold through one fund.
Diversification helps in portfolio stability.
Provides equity / non-equity taxation benefits depending on the asset allocation.
By investing in Multi Asset Allocation Funds, you can achieve diversification across asset classes, which serves as a protective measure for your portfolio in the event of a negative occurrence affecting a specific asset class. This diversification helps mitigate risks and reduces the need for you to constantly readjust your asset allocation according to changing market conditions. Unlike individual investors who may incur capital gains taxes when making investment switches, the fund manager takes care of the rebalancing process in these funds, allowing you to avoid such tax implications.
