Top 10 Multi Asset Allocation Funds to Invest Online in 2024
Multi Asset Allocation Fund, in accordance with SEBI guidelines, distribute a minimum of 10% across three or more asset classes, such as equities, debt, gold, real estate, and commodities. This diversified approach mitigates risk from volatility in any asset class and gives investors wide exposure, potentially leading to favourable returns.
The allocation strategies within Multi-Asset Funds are at the fund manager’s careful discretion. They adjust investments based on thorough market conditions and analysis. This adherence to the principle of diversification offers flexibility to capitalise on varying market trends. For example, during market volatility, the manager may increase allocation to safer instruments like debt or gold, while in bullish markets, they may favour equity-linked schemes for optimal returns, ensuring your investments are in capable hands.
Top 10 Multi Asset Allocation Funds to Invest in 2024
Here is a list of the top multi asset allocation funds for 2024 based on their 1Y Returns and 5Y CAGR:
| Fund Name | Fund Size (in Cr) | Expense Ratio (%) | 1Y Returns | 5Y CAGR |
|---|---|---|---|---|
| Quant Multi Asset Fund | 2,173.05 | 0.68 | 45.19% | 29.65% |
| ICICI Pru Multi-Asset Fund | 36,843.05 | 0.72 | 31.70% | 20.89% |
| HDFC Multi-Asset Fund | 2,642.43 | 0.85 | 22.06% | 16.09% |
| UTI Multi Asset Allocation Fund | 1,394.07 | 1.13 | 38.13% | 15.72% |
| SBI Multi Asset Allocation Fund | 4,677.37 | 0.58 | 28.37% | 15.65% |
| Axis Multi Asset Allocation Fund | 1,202.42 | 1.43 | 17.58% | 14.62% |
| Nippon India Multi Asset Fund | 3,120.10 | 0.30 | 32.26% | - |
| Motilal Oswal Multi Asset Fund | 101.73 | 0.97 | 14.47% | - |
| Tata Multi Asset Opp Fund | 2,754.79 | 0.37 | 26.68% | - |
| Baroda BNP Paribas Multi Asset Fund | 1,199.58 | 0.90 | 29.53% | - |
Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.
Note: The data on the list is from 10th May, 2024. However, for real-time updates on stock prices and market trends, visit the smallcase stocks collection today!
Overview of the Multi Asset Allocation Funds in India 2024
Quant Multi Asset Fund
The Quant Multi Asset Fund, a hybrid mutual fund from Quant Mutual Fund, was launched by its fund managers Sanjeev Sharma, Vasav Sahgal, Ankit A Pande, and Varun Pattani. With an AUM of ₹2,173.05 Crores, its latest NAV stands at ₹134.449 as of 10 May 2024. Over the past year, the scheme has yielded returns of 45.19%, while over the last 3 years, it has returned 100.24%. Since its inception, the scheme has shown significant growth, with returns of 450.27%. The minimum SIP amount for investment in this scheme is ₹1000. It is one of the best multi asset mutual funds listed on our top 10 multi asset funds list based on 1Y Returns and 5Y CAGR.
ICICI Pru Multi-Asset Fund
The ICICI Prudential Multi Asset Fund, a hybrid mutual fund scheme by ICICI Prudential Mutual Fund, is managed by fund managers Manish Banthia, Akhil Kakkar, Ihab Dalwai, Sankaran Naren, Sri Sharma, and Gaurav Chikane. It has an AUM of ₹39,534.59 Crores and a latest NAV of ₹711.024. Over the past year, the scheme has shown a return performance of 31.70%, over the last 3 years, it’s been 89.37%, and since its launch, it’s grown by 505.06%. The minimum SIP amount for investment in this scheme is ₹100.
HDFC Multi-Asset Fund
HDFC Multi Asset Fund, a hybrid mutual fund by HDFC Mutual Fund, launched on an undisclosed date, is currently overseen by fund managers Anil Bamboli, Arun Agarwal, Srinivasan Ramamurthy, Bhagyesh Kagalkar, and Nirman S. Morakhia. With an AUM of ₹2,799.47 Crores, its latest NAV stands at ₹68.406. In the last year, the scheme’s return performance was 22.06%, while over the past three years, it achieved 53.36%, and since its launch, an impressive 257.23%. Investors can start with a minimum SIP investment of ₹100.
UTI Multi Asset Allocation Fund
The UTI Multi Asset Allocation Fund,, a hybrid mutual fund by UTI Mutual Fund, was launched on an undisclosed date. Currently managed by Sharwan Kumar Goyal and Sunil Madhukar Patil, it boasts an AUM of ₹1,681.45 Crores, with the latest NAV standing at ₹72.148. Over the past year, it yielded a return of 38.13%, while its performance over the last three years stands at 67.12%. Since its inception, the scheme has delivered a return of 203.91%. The minimum SIP amount required for investment in this scheme is ₹500. It is also one of the best performing multi asset funds on our list.
SBI Multi Asset Allocation Fund
The SBI Multi Asset Allocation Fund, a hybrid mutual fund by SBI Mutual Fund, managed by Mansi Sajeja, Dinesh Balachandran, and Vandna Soni, boasts an AUM of ₹4,677.37 Crores. Its latest NAV stands at ₹56.885. Over the past year, it has yielded returns of 28.37%, over the last three years 55.76%, and since its launch 266.38%. Investors can start with a minimum SIP investment of ₹500.
Axis Multi Asset Allocation Fund
Axis Multi Asset Allocation Fund, a Hybrid mutual fund offered by Axis Mutual Fund, is managed by fund managers Ashish Naik, Devang Shah, Hardik Shah, Pratik Tibrewal, and Jayesh Sundar. Launched on an undisclosed date, it currently holds assets under management (AUM) totaling ₹1,202.42 Crores, with a latest NAV of ₹39.740. In the past year, the scheme has yielded returns of 17.59%, while over the last three years, it has delivered returns of 36.63%. Since its inception, the scheme has seen remarkable growth, with returns of 212.30%. Investors can start investing in this scheme with a minimum SIP amount of ₹100.
Nippon India Multi Asset Fund
Nippon India Multi Asset Fund, a hybrid mutual fund from Nippon India Mutual Fund, launched on an unspecified date, is currently managed by Ashutosh Bhargava, Vikram Dhawan, and Sushil Budhia. With an AUM of ₹3,120.10 Crores and a latest NAV of ₹19.355, its return performance over the last year is 32.26%, over the last 3 years is 64.29%, and since its launch is 95.08%. The minimum SIP investment amount for this scheme is ₹100.
Motilal Oswal Multi Asset Fund
Motilal Oswal Multi Asset Fund is a Hybrid mutual fund by Motilal Oswal Mutual Fund. It was launched on an undisclosed date and is presently managed by Santosh Singh and Rakesh Shetty, holds an AUM of ₹101.73 Crores, with its latest NAV standing at ₹13.318. Over the last year, the scheme has yielded returns of 14.48%, while over the past three years, it has shown returns of 25.50%. Since its inception, it has generated returns of 32.15%. The minimum SIP investment for this scheme is ₹500.
Tata Multi Asset Opp Fund
Tata Multi Asset Opportunities Fund is a Hybrid mutual fund by Tata Mutual Fund. It was launched on an unspecified date and is presently managed by fund managers Murthy Nagarajan, Sailesh Jain, Rahul Singh, and Tapan Patel. With an AUM of ₹2,754.79 Crores, its latest NAV stands at ₹22.346. In the past year, the scheme yielded returns of 26.68%, while over the last three years, it showed a performance of 60.32%. Since its inception, the return stands at 134.03%. The minimum SIP investment for this scheme is ₹100.
What is a Multi Asset Allocation Fund?
Multi-asset allocation funds are investments that combine different types of assets, such as stocks, bonds, and real estate, into a single fund. These funds use sophisticated algorithms to adjust their investments based on market conditions, aiming to maximise returns while minimising risk. Now that we know what we mean by multi-asset allocation fund, let’s explore some top multi-asset funds based on their 1Y Returns and 5Y CAGR.
How do Multi Asset Allocation Funds Work?
Multi-asset allocation funds invest in diverse asset classes to effectively manage investment risk. Fund managers continuously monitor and adjust asset allocation based on economic indicators and market trends.
Diversification helps mitigate the impact of volatility. SEBI mandates that multi-asset funds invest at least 10% in three asset classes. Investors benefit from a professionally managed portfolio offering a unique blend of asset classes, eliminating the need for individual investment research. These funds aim to combine the hedging benefits of gold, stability of fixed earnings, and growth potential of equities, enhancing overall investment experience and minimising return volatility.
Purpose of Multi Asset Allocation Funds
These funds aim to enhance and diversify investment portfolios by allocating assets across multiple classes. This strategy helps cushion the risks associated with investing in a single asset class.
Features of Multi Asset Allocation Funds
Here are a few key features of Multi Asset Allocation Funds:
- Diversification: SEBI mandates a minimum 10% investment across three or more asset classes, ensuring investors access various assets within one scheme. Investors should carefully review scheme documents and align investments with their goals.
- Fund Manager’s Role: In these funds, the fund manager plays a crucial role in determining investment style and type. Their autonomy is higher due to the fund’s diversity. Investors should assess the fund manager’s track record and experience.
- Returns: These funds do not guarantee returns, and market conditions can affect performance, even in debt-focused funds. Investors must plan investments accordingly.
Factors to Consider While Investing in Multi Asset Allocation Funds
Here’s what to keep in mind when you consider investing in multi asset allocation funds:
- Investment Duration: Aim for medium to long-term investments, ideally over 3-5 years, avoiding short-term goals.
- Financial Objectives: Assess your goals and ensure they align with the fund’s focus on balanced growth and stability rather than high returns.
- Risk Tolerance: Determine if you’re comfortable with the fund’s conservative risk profile or if you seek higher returns with increased risk.
- Cost Analysis: Understand the fund’s expense ratio and potential impact on your net returns due to active management fees.
- Performance History: Review the fund’s past performance for consistency, though it does not guarantee future results.
- Fund Manager Expertise: Investigate the manager’s background and track record in managing diversified investments to ensure fund management quality.
Who Should Invest in Multi Asset Allocation Funds?
Investors seeking stable returns without high risk can benefit from investing in a Multi-Asset Allocation Mutual Fund. This fund offers diversification across various financial instruments, making it suitable for at least five years of long-term investments. Investors can opt for either an equity-focused or debt-focused Multi Asset fund depending on their risk tolerance and investment objectives. While equity-linked schemes offer potential for higher long-term gains, they come with increased risk. Conversely, debt-oriented schemes provide stability for investors seeking consistent returns.
How to Choose the Best Multi Asset Allocation Funds?
When selecting the best multi-asset allocation funds for your investment portfolio, consider the following factors:
- Investment Objective: Determine your investment goals, whether it’s capital appreciation, income generation, or a balanced approach. Look for multi-asset funds that align with your objectives.
- Asset Allocation Strategy: Evaluate the fund’s asset allocation strategy, which typically includes a mix of equities, bonds, and other asset classes. Ensure that the allocation strategy is well-diversified and suits your risk tolerance.
- Fund Performance: Analyze the fund’s historical performance, focusing on long-term returns and consistency. Look for funds with competitive returns relative to their benchmarks and peers.
- Fund Manager Expertise: Assess the fund manager’s expertise and track record. A skilled and experienced manager can significantly improve fund performance and asset allocation decisions.
- Expense Ratio: Consider the fund’s expense ratio, which represents the annual fees charged by the fund. Lower expense ratios can contribute to higher net returns for investors over time.
- Risk Management: Evaluate the fund’s risk management practices, including measures to mitigate downside risk and volatility. Look for funds that employ robust risk management techniques to protect investors’ capital.
- Fund Size and Liquidity: Consider the fund’s size and liquidity, as larger funds may offer better economies of scale and liquidity benefits. Ensure that the fund’s size is appropriate relative to its investment strategy.
- Investment Philosophy: Understand the fund’s investment philosophy and approach, including any specific investment themes or strategies the fund manager employs.
How to Invest in Multi Asset Allocation Funds?
Investing in Multi Asset Allocation Funds offers diversification benefits by spreading investments across asset classes like equities, bonds, and commodities. Here’s how you can invest in these funds:
- Research: Research different Multi Asset Allocation Funds available in the market. Look into their investment objectives, asset allocation strategies, historical performance, and fund manager expertise.
- Assess Risk Appetite: Determine your risk tolerance and investment goals. Multi Asset Allocation Funds come in different risk profiles, ranging from conservative to aggressive. Choose a fund that aligns with your risk appetite and financial objectives.
- Understand Asset Allocation: Pay attention to the fund’s asset allocation strategy. Different funds allocate assets differently based on market conditions and economic outlook. Understand how the fund manager adjusts asset allocation to manage risk and optimise returns.
- Analyse Performance: Evaluate the fund’s historical performance across different market cycles. Look for consistency in returns and how the fund has performed relative to its benchmark and peers.
- Consider Fund Manager Expertise: Assess the experience and track record of the fund manager. A skilled and experienced fund manager can effectively navigate market volatility and make informed investment decisions.
- Review Fund Fees: Understand the fund’s fee structure, including management fees, expense ratios, and other charges. Compare fees across different funds to ensure you get value for your investment.
- Consult Financial Advisor: For personalised investment advice, consult a financial advisor. A professional advisor can help assess your financial situation, recommend suitable Multi-Asset Allocation Funds, and create a well-rounded investment portfolio.
How do Multi Asset Allocation Funds Generate Returns?
Multi asset allocation Funds, also known as MAAPs, generate multi asset allocation fund returns through strategic diversification across multiple asset classes. These funds actively allocate investments across equities, fixed-income securities, commodities, and other assets to optimize returns while managing risks.
- Dynamic Asset Allocation: Multi Asset Allocation Funds dynamically adjust their asset allocation based on market conditions and economic outlook. Fund managers continuously assess various asset classes’ performance and reallocate investments accordingly to capitalise on opportunities and mitigate risks.
- Capitalising on Market Trends: Fund managers leverage market trends and economic indicators to identify attractive investment opportunities. By analysing macroeconomic factors such as interest rates, inflation, and global market trends, they adjust asset allocation to maximise returns in different market scenarios.
- Risk Management Strategies: Multi Asset Allocation Funds employ risk management strategies to protect investors’ capital during market downturns. This includes diversification across asset classes, geographical regions, and investment styles to minimise portfolio volatility and preserve capital.
- Active Fund Management: Fund managers actively monitor and rebalance the fund’s portfolio to ensure optimal asset allocation. They may reallocate investments between equities, bonds, real estate, and alternative assets based on changing market conditions and investment opportunities.
- Flexibility and Adaptability: Multi-asset allocation Funds can invest in a wide range of asset classes and investment instruments. This flexibility allows fund managers to adapt quickly to changing market dynamics and capitalise on emerging opportunities to generate returns.
Benefits of Investing in Multi Asset Allocation Funds
Investing in Multi Asset Allocation Funds offers key advantages that include:
- Enhanced Diversification: These funds mitigate risk by spreading investments across multiple asset classes and yield consistent returns across various market cycles.
- Automated Portfolio Rebalancing: Rather than manually adjusting portfolios, fund managers handle the task, ensuring alignment with market conditions and investment objectives.
- Customised Portfolios: Multi-Asset Allocation Mutual Funds leverage industry research and market monitoring to construct well-balanced portfolios tailored to optimise returns.
- Flexible Entry and Exit: Investors can enter and exit the fund without incurring charges. Additionally, partial redemptions within the first year are permitted without penalties, making these funds suitable for both short-term and long-term investors.
Risks of Investing in Multi Asset Allocation Funds
Investing in the best multi asset allocation funds has its limitations. Before investing, it’s essential to understand the following drawbacks:
- Understanding the Investment: Multi asset allocation funds spread investments across different asset classes, making tracking challenging. This complexity can obscure specific risks and allocation strategies, making it hard to anticipate performance in varying market conditions.
- Growth Potential vs. Stability: While multi asset funds offer risk reduction through diversification, this diversification can limit growth potential. They often don’t yield the high returns of riskier, more focused investments, particularly in bullish markets.
- Expense Ratios: Consider the fees. Managing multi-asset funds typically incurs higher costs due to constant rebalancing and monitoring. These expenses can diminish overall returns, prompting careful consideration of whether the potential for reduced volatility justifies the added cost.
Taxability of Multi Asset Allocation Funds
Multi Asset Allocation Funds have varying equity exposure, leading to differing tax implications on returns. Amendments to the 2020 Budget dictate that investors are taxed based on their fund’s classification. Funds with over 65% equity exposure are taxed as equity-oriented, while those with lower exposure are taxed akin to debt funds.
To Wrap It Up…
In conclusion, your ideal asset allocation hinges on your unique situation, including your own age, investment goals, time frame, and risk tolerance. Multi asset allocation funds offer a diverse and comprehensive investment strategy, especially suitable for investors with lower risk tolerance or minimal time for active management. This might be an attractive benefit for investors wishing to diversify their portfolios. However, it is absolutely essential for investors to conduct their own market research and consult a financial advisor before investing in anything.
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Frequently Asked Questions(FAQs) on Multi Asset Allocation Funds
Multi-asset allocation funds are investments that combine different types of assets, such as stocks, bonds, and real estate, into a single fund. These funds use sophisticated algorithms to adjust their investments based on market conditions, aiming to maximise returns while minimising risk.
Multi Asset Allocation Funds provide access to diverse asset classes, adjusting their mix based on predefined rules to achieve an optimal blend. They usually suit investors with a horizon of at least 5 years.
Multi Asset Allocation Funds determine their investment allocation based on chosen asset classes. The fund also determines the percentage allocation to each class and sets thresholds for transferring funds between classes.
Investors seeking alternatives to fixed income or slightly higher returns with lower risk can opt for multi-asset allocation funds. These funds spread investments across various asset classes, making them suitable for beginners and those with limited financial expertise.
Multi Asset Allocation Funds have varying equity exposure, leading to differing tax implications on returns. Amendments to the 2020 Budget dictate that investors are taxed based on their fund’s classification. Funds with over 65% equity exposure are taxed as equity-oriented, while those with lower exposure are taxed akin to debt funds.
