Multi Asset Allocation Funds it is a portfolio of assets that comprises of more than one asset class, where these asset classes are used as an investment. These funds can be invested in equity instruments, gold-oriented schemes, debt funds, etc. approximately 80% of the capital can be invested in these schemes. This scheme offers steady income and good capital appreciation to the investor as they are maintained to invest in balanced portfolio of the investment. Based on the type of portfolio these funds are classified as two types of namely Risk Tolerance Funds and Target Date Funds. Let us clarify about these funds, the risk tolerance funds are the category funds which completely depends upon the investors risk appetite, if the investor is ready to take higher risk, he/she can go for equity fund savings, if the investor is lower risk appetite then the investor can be allocated to fixed income funds. When it comes to target date funds it depends on the length of the investment’s horizon either short term or long-term horizons. The aim of this scheme is to offer the investor multiple sources to park their money and this is most suitable for those who have lower risk appetite also who wants regular income and steady capital appreciations.
Factors of Multi Asset Funds:
Based on the investment horizon the tax is liable, if the investor holds the money for 3 years of tenure then short-term capital gain tax is applicable of the tenure is more than 3 years then long-term capital gain tax is applicable.
Every Fund house charges fund management fees, so investor must look for the scheme that is with lower expense ratio, the expense ratio and the returns are inversely proportional lower the expense ratio higher the returns and vice versa.
Multi asset allocation funds are low risk funds, these returns provide regular income to the investors.
These schemes offer stable and continues income to the investors with mere risks effects.
Advantages of Multi Asset Allocation Funds:
- Lower risks
- Offers Regular income
- Allocates diversification for investment of funds.
- Balanced Portfolio
- Underlined entry and exit of funds.