What are multi-asset allocation funds?
Multiple asset allocation funds are hybrid funds with a mandate to invest 10% in at least 3 of the asset classes. Typically, these funds are exposed to a mix of assets including stocks, debt and an additional asset class e.g. gold, real estate, etc.
Advantages of Multi Asset Allocation funds
â¢ Less risky than most other hybrid funds because the corpus is spread over several asset classes and therefore the concentration risk is minimal
â¢ These funds are also known to offer stable returns over a period of time.
Who should invest in Multi Asset Allocation funds?
Investors with an investment horizon of at least 3 years or more and not willing to take on higher risks may consider investing in multiple asset allocation funds for consistent returns over the period of their investment. . The long-term equity allocation allows you to realize capital gains, whereas if you are looking to diversify your portfolio, the multi-asset allocation fund could be the right choice for you.
1. Axis Triple Advantage Fund:
This multi-asset allocation fund from Axis Mutual Fund was launched in 2010 and, since its inception, has offered a return of 10.74%. The fund as of August 31, 2021 manages an AUM of Rs. 1,180 crore and its expense ratio is 2.15%. The fund’s benchmark index is NIFTY 50 TRI (65), NIFTY Composite Debt Index (20), Domestic Price of Gold (15).
The fund’s corpus is broadly split between equities, debt and commodities. Within the equities space, where it has a maximum allocation, the fund is more concentrated in sectors such as finance, technology, chemicals and services, among others. The main equity holdings of the fund include TCS, Infosys, ICICI Bank, HDFC Bank, etc.
Likewise, the main debt securities of the fund are 7.9% LIC housing finance bonds, government development loans, GOI securities and bonds / MNT, etc.
Monthly SIP of Rs. 10,000 started 5 years ago is now worth Rs. 9.48 lakh, offering gains of Rs. 3.48 lakhs, while the lump sum investment of Rs. 1 lakh during the same period has increased in value to Rs. 1.84 lakh.
2. SBI Multi Asset Allocation Fund:
This hybrid fund from the SBI Mutual fund team was launched in December 2005 and has since offered a return of 8.67%. As of August 31, 2021, the fund’s AUM stood at Rs. 439 crore, while its expense ratio is 1.74%. For the different asset classes, the fund’s benchmark index is CRISIL 10-Year Gilt (45), NIFTY 50 TRI (40), Domestic Price of Gold (15).
Here the funds are split between stocks, debt, commodities and cash and cash equivalents. Within the equity space, the fund has maximum exposure to energy, followed by FMCGs, healthcare, finance and services, among others.
Major holdings of stocks include Bharat 22 ETF, CPSE ETF, SPDR Gold Trust, Info Edge, Apollo Hospitals, among others.
Rs. 10,000 monthly SIPs started in SBI Multi Asset Allocation fund increased in value to Rs. 8.2 lakh, offering gains of Rs. 2.2 lakh.
2 highest rated multiple asset allocation funds by value seeking to invest in 2021
|Multi-asset allocation fund||Evaluation by value search||Minimum SIP amount||SIP Annualized return over 1 year||SIP Annualized return over 3 years||SIP Annualized return over 5 years|
|Axis Triple Advantage||5 stars||Rs. 1000||43.78%||26.71%||18.58%|
|SBI Multi Asset Allocation||5 stars||Rs. 500||22.93%||16.48%||12.35%|
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