Multi-asset allocation funds: Your companion to tide over market volatility

Since June 2022, sentiments in the market have turned bullish due to sustained buying by FPIs. This may be because India is perceived to have good growth prospects. Besides this, cooling of crude oil prices and easing of inflation rates are some of the other factors that have further aided the mood on Dalal Street.

However, the ongoing geopolitical crisis between Russia and Ukraine and any escalation between China & Taiwan could be party spoilers adding to the market volatility.

One needs to learn how to be resilient in the face of such unsettling events and not shatter under pressure. This would mean choosing investments that can potentially help you benefit from volatility in the long run.

Multi-asset allocation funds can come in handy as a way of dealing with market volatility and economic uncertainty. But what are multi asset allocation funds? Read on to know more.

As the name suggests multi-asset allocation funds invest in multiple assets. Securities and Exchange Board of India (SEBI) has defined multi-asset allocation funds as funds that invest in at least three asset classes with a minimum allocation of at least 10% each in each asset class. Some of the asset classes include; equity, debt, gold, real estate and so on.

This allows you to diversify your financial portfolio. This diversification can be considered as an opportunity towards building a sustained wealth corpus on the basis of your goals.

Multi asset allocation funds can help in navigating uncertainty with the right asset allocation as per market trends. For instance, during uncertain times when equity markets may be down, debt can provide a source of income and gold may help limit downside risk. This improves the risk-reward potential of the portfolio.

These funds are dynamically managed hybrid funds and may be suitable for those who do not want to put all their eggs in one asset class. In these funds, fund managers re-balance the portfolio depending on the market movements.

All in all, multi-asset allocation funds facilitate diversification across asset classes, which may help reduce risk and optimise gains. They also enable portfolio rebalancing, based on the performance and the outlook of each underlying asset by a professional fund manager. This can help provide relief to investors from timing and monitoring performance of different asset classes. Investors can also benefit from the strong research capabilities of a fund management team.

Investors can assess and understand how the fund’s allocation across asset classes has moved across time and market cycles to gauge if the fund is suitable for them. These funds are suitable for investors seeking long-term wealth creation.

Before investing, it is important for investors to take a close look at their risk appetite, investment horizon and goals in order to make smart investment decisions.

Click on to know more about multi asset allocation funds.


An investor education initiative.

Visit to know more about the process to complete a one-time Know Your Customer (KYC) requirement to invest in Mutual Funds. Investors should only deal with registered Mutual Funds, details of which can be verified on the SEBI website For any queries, complaints &  grievance redressal, investors may reach out to the AMCs and / or Investor Relations Officers. Additionally, investors may also lodge complaints on if they are unsatisfied with the resolutions given by AMCs. SCORES portal facilitates you to lodge your complaint online with SEBI and subsequently view its status.

Mutual fund investments are subject to market risks, read all scheme related documents carefully.

Moneycontrol journalists were not involved in the creation of the article

Leave a Reply

Your email address will not be published. Required fields are marked *