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Multi Asset Allocation

A combination of asset classes that are used as an investment is known as Multi-Asset Allocation Mutual Funds. Typically, it comprises more than just one asset class and intends to create a portfolio of assets. The distribution of assets and their composition tend to vary depending on an individual investor.These funds invests in at least three asset classes with a minimum allocation of at least 10% each in all three asset classes.

Through a multi-asset allocation fund, an investor gets to invest in equity and debt instruments, equity-oriented schemes, and gold and gold-oriented investment instruments.

Suitability:

  • • Multi asset funds are comparatively less risky than other funds which makes them suitable for investors who are not willing to allocate their resources in volatile funds. However, there are investors who understand that diversification can be of great benefit and balanced portfolios might be riskier than they appear.
  • • These funds can be the best option to invest for the individuals who are not inclined to hold too many funds. The diverse portfolio thus gives them the exact exposure to different assets through one single investment.

Minimum Investment:

The minimum investment varies from scheme to scheme. It could range between Rs.100/ – to Rs.5,000/ -.

Taxability:

  • • If an investor has made an investment in a debt mutual fund and withdraws the amount before 3 years of investment, Short Term Capital Gains Tax would be levied, as per the income tax slab of the investor.
  • • If an investor withdraws the investment including capital gains post 3 years of investment, 20% Long Term Capital Gains Tax of 20% is levied, with the benefit of indexation.

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