Multi Asset Fund

Unlock the Power of Multi Asset Allocation Funds

Choosing the right mutual fund can get confusing at times, particularly when there is a lot of technical jargon involved, making it challenging for potential investors. One such fund that may seem complicated at first is the Multi-Asset Allocation Fund.

In this article, we take a look at what a multi-asset allocation fund is and what sets it apart from other investments. Keep reading to find out!  

What is a Multi Asset Allocation Fund?

A multi-asset allocation fund is a type that invests in a mix of asset classes, which further helps in diversifying investments. These allocations and asset classes differ from fund to fund, but as per SEBI (Securities and Exchange Board of India) regulations, a multi-asset fund must invest at least 10% across three asset classes.   

Typically, these funds create a portfolio which is a blend of equity, debt, and another asset class like gold or real estate. Doing this allows you to deliver capital appreciation with reduced risk. What sets these funds apart is that they employ diverse asset allocation strategies that are designed to adapt to evolving market conditions.  

Advantages of a Multi Asset Allocation Fund  

Following are some of the advantages of multi-asset allocation Allocation Funds  

Diversification for Stability   

One of the most significant benefits of a multi-asset allocation fund is diversification. As its name suggests, the multi-asset allocation fund invests across multiple asset classes. This gives investors access to assets across various classes, reducing risk thanks to diversification. By spreading investments across multiple asset classes, the investments made are protected against any downside and create a resilient portfolio with a good mix of volatile and stable assets.  

Managing risk is crucial for individuals who have sensitive goals. These individuals cannot afford to take on added risk and multi-asset allocation funds excel in this aspect.   

Professional Expertise for Each Market Condition  

How many different market conditions have you seen since 2020? A COVID-19 fall was followed by a bull market, followed by corrections and a slowdown before another bull run. This would mean that an individual would have to adjust his portfolio for each market situation.  

If you’re a beginner, you must take every step carefully, and under the supervision of experienced professionals to secure a safe spot amidst all the turbulence.

A multi-asset allocation fund also brings forward the benefit of automatic portfolio rebalancing. These funds are managed by professional investment managers who have years of experience. They analyze and select asset allocations to suit each market condition, giving professional management and, at the same time reduced risk and a portfolio for each market condition.   

Unrestricted Entry and Exit  

A multi-asset allocation fund also provides the benefit of entry and exit. These funds do not have entry and exit charges if an investor makes a redemption for 10% of their investment or less within one year. If more than 10% of the investment is redeemed, then an exit is levied. In this case, if the redemption is made after one year or more, then no exit load is levied.   

What are the tax implications of Investing in Multi Asset Allocation Funds?  

Multi-asset allocation funds are taxed based on their portfolio. If the equity exposure in the fund exceeds 65% then the fund is taxed as an equity fund, otherwise, it is treated as a debt fund for tax purposes. Dividends from a multi-asset allocation fund are considered as part of income and taxed as per the investor’s income slab.   


Multi-asset allocation funds are an ideal option for investors who want to invest long-term and, at the same time, are looking for reduced risk with a portfolio that survives and performs in any market condition. Their indices provide deeper insights into their functioning and status.

Before investing in a multi-asset allocation fund, investors must first ensure that their goals and risk appetite are aligned with those of the fund.

Happy Investing! 


  • What are the benefits of a multi-asset fund of funds?

    A multi-asset fund of funds provides diversification, meaning your investment spreads across distinct types of assets like stocks, bonds, and more. It’s like having a variety pack where you get the benefits of professional management and easy access to different investments all bundled up in one place. This diversity can help manage risks and potentially enhance returns. 

  • Is multi-asset fund safe? 

    Safety in a multi-asset fund relies on a few factors. Diversification helps spread risk, but it also depends on the expertise of the fund manager and the current market conditions. While it’s designed to manage risks, no investment is complete without risk. 

  • What is a multi-asset fund in Sebi? 

    In the context of SEBI (Securities and Exchange Board of India), a multi-asset fund is a type of investment fund regulated by SSEBI rules and guidelines. These funds invest in various asset classes like stocks, bonds, or commodities and are governed by SEBI’s regulatory framework to ensure investor protection and market integrity. 

  • What are the 4 types of asset allocation?

    There are four primary types of asset allocation. They include stocks (equities), bonds (fixed income), cash equivalents, and alternative investments (such as real estate, commodities, or derivatives). Each type serves a unique purpose in a portfolio and can be adjusted based on an investor’s risk tolerance financial goals. 

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