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MULTI-ASSET ALLOCATION FUNDS
Business Standard
|April 11, 2025
Equity or debt-oriented? Let risk profile, time horizon decide
Diversified equity funds (large, mid and small) have declined between 11 and 19 per cent over the past six months.
Multi-asset allocation funds (MAAFs), a hybrid category of funds, have done a much better job of containing the downside by declining 5.6 per cent over the same period.
Amid market turbulence, investors seeking stability with reasonable returns may go for MAAFs. These schemes invest across equities, bonds and commodities, with a minimum 10 per cent allocation to each asset class.
In addition, they may invest in units of Infrastructure Investment Trusts (Invits) and Real Estate Investment Trusts (Reits).
"Multi-asset funds attempt to give smoother returns with varied asset allocation mixes that have lower correlations with one another, thereby creating a stable return profile with possibly lower drawdowns," says Rahul Pal, chief investment officer-fixed income, Mahindra Manulife Mutual Fund.
This story is from the April 11, 2025 edition of Business Standard.
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