Rebalance if allocation in your portfolio has drifted

Multi-asset allocation funds (MAAFs) are currently the best-performing category among hybrid funds across the one-, three-, and five-year horizons.

- HIMALI PATEL

Their diversified structure has helped them deliver strong returns in recent times.

“Funds that had allocated to gold and silver saw a significant boost in their returns due to the recent rally,” says Jiral Mehta, senior manager — research, FundsIndia.

Fund management approach

MAAFs must invest in at least three asset classes, with a minimum 10 per cent in each. “Fund managers allocate money across asset classes based on market outlook, valuation, and risk appetite,” says Harsh Vira, chief financial planner and founder, FinPro Wealth.

Benefit from tailwinds across assets

These funds provide a ready-made, diversified portfolio. “They help investors participate in multiple asset classes and benefit from their tailwinds over time,” says Akhil Chaturvedi, executive director and chief business officer, Motilal Oswal Asset Management Company.

“They reduce risk through diversification and provide stable returns across market cycles. Investors also gain from professional management and automatic portfolio rebalancing,” says Vira.

Asset allocation becomes more difficult