Is it time for Multi Asset Fund ?
Posted By: Admin
We are living in unprecedented times, with Covid 19 wrecking havoc to our lives and livelihoods of our countryman like nothing we have ever seen. Yet this is happening as the Covid situation in the western world is vastly improving. Obviously the Vaccination coverage and speed has been the chief contributor to this fact. While it is a fact that relatively lesser population and affordability has enabled these countries to rapidly scale up their vaccination programs. We in India have suffered from sheer size and enormity of the task ahead. It now appears that we are going to take some time before we see the end of this virus in India. We may continue to experience 3, 4 or even 5th wave till everyone has either attained immunity or is vaccinated. So that means at least in the next 24 months we are going to be going through some challenge or the other relating to the Covid issue.
Uncertainty and investing are bad bedfellows. The uncertainty thrown up by Covid means that Equity markets may not always be the best place of all the money. Debt investments yield too low a return. What if there is a spike in Covid casualties and the equity markets react negatively and gold does well. So how do I plan for a situation that cannot be planned.
Welcome the Multi Asset Fund, these are funds that invest in Equity, Debt & Gold ideally the proportion would be 40 : 40 :20 , but these can be different for different funds. With this kind of a portfolio , even if Equity markets are correcting the impact on the portfolio is limited as only 40% of the fund is exposed thereto. Similarly for debt & gold as well. So if you want to stay in getting reasonable returns but not sure if you want to venture to equity, or debt or gold, then pick them all through the multi asset funds.
Given that from a taxation perspective Multi Asset funds are debt funds, ideally one should look at these from a 3 year perspective for the best post tax outcomes.
Past performance of some of the funds are indicated below. The list is indicative and not exhaustive.
|
Multi Asset Funds Performance |
Performance |
|
|
Fund Name |
3 years |
5 years |
|
ICICI Pru Multi Asset Fund |
10.45% |
14.49% |
|
SBI Multi Asset Fund |
9.53% |
9.76% |
|
Axis Triple Advantage Fund |
12.89% |
12.19% |
|
Quantum Multi Asset Fund |
22.09% |
15.09% |
|
Source : Moneycontrol , 4th May 2021 |
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