Gone are the days when people believed that investing was a riskier option. From Gen-Z to millennials, the trend for investment is climbing the ladder. Opting for an investment journey is not risky until & unless you have the right knowledge or the right advisors to help you out.  

When it comes to investing, there are different types of people, one that wants high returns and a high tolerance for risk, one that is risk averse and appreciates lower returns with a low level of risk, and one that is more balanced by following a multi-asset allocation strategy.

In the ever-evolving landscape of investment, one strategy has been gaining considerable traction for its ability to navigate through market volatility and provide a balanced return profile: multi-asset allocation.  

This approach involves diversifying investment across asset classes such as equities, fixed income, real estate, commodities, and alternative investments like hedge funds or private equity.

An all-in-one solution is offered by multi-asset allocation funds. Funds in this category invest across asset classes and fall under the hybrid category of mutual funds. In specific terms, multi-asset allocation funds are required to invest at least 10% in each asset class. equity, debt and gold as per the regulations formulated by market regulator SEBI.  

Through this approach, you create a well-diversified portfolio, which balances some of the potential risks associated with concentrated investments.

Performance of Multi-Asset Funds:

The following graphs show the RETURNS of multi-asset funds over the last 3 and 5 years. 

3-Year Rolling Returns:  


Source: Motilal Oswal Mutual Fund

5-Year Rolling Returns:  

Source: Motilal Oswal Mutual Fund

Here's a table showing how different asset classes have alternated in leading the return category since 2005. During times of inflation or economic uncertainty, domestic equities performed better than gold due to robust economic growth. 

Source: Motilal Oswal Mutual Fund

Regardless of the circumstances, investors are better positioned to seize opportunities if their portfolio consists of a combination of these asset groups.

Disclaimer: The above information should not be relied upon for personal or financial decisions, and you should consult an appropriate financial professional for specific advice. The information presented under our newsletter and blogs is solely for informational purpose