Multi Asset Allocation Funds: An Overview

Do you want a single investment option that offers a balanced exposure to multiple asset classes? It’s a multi-asset allocation fund.

Are you interested to know more about these funds? Let’s discuss their meaning, definition, top features, pros & cons, etc., to help you grasp a deeper understanding!

Multi Asset Allocation Funds: Meaning & Definition

Multi asset allocation funds are hybrid mutual funds that invest in at least 3 asset classes (equity, debt, gold, real estate, etc.), with each asset class accounting for at least 10% of the fund’s total portfolio.

These funds aim to reduce the overall risk and provide investors with a more balanced exposure to the market. Experienced fund managers allocate and rebalance assets based on market conditions to fetch optimum returns.

Related: Equity Funds | Debt Funds | Hybrid Funds

Top Features

Let’s discuss the unique features of multi-asset allocation funds.

  1. These funds invest in 3 or more asset classes.
  2. Each asset class should account for at least 10% of the total asset.
  3. These funds offer a balanced exposure to the market by investing in different asset classes.
  4. Multi-asset allocation funds carry lower risk than pure equity funds and some other hybrid funds.
  5. These funds aim to reduce risk by spreading investments across different sectors and securities.
  6. Fund managers of multi-asset funds can adjust the fund’s portfolio according to market conditions.

Pros & Cons

Here is a table to help you understand the pros & cons of multi-asset allocation funds.

DiversificationComplexity to asset allocation
Professional managementDependence on fund manager expertise
Potential for stable returnsFees and Expenses
Mitigation of single asset riskMarket Timing Challenges
Adaptability to market conditionsLimited Control for Investors

Who Should Invest

Each investor is different with different needs and investment goals. However, based on the characteristics of multi-asset allocation funds, the following types of investors may opt for these funds. Note- This should not considered as investment advice.

A. Investors Who Want Diversification: These funds offer a well-diversified portfolio under one investment vehicle. This makes these funds attractive to investors seeking diversification in their investments.

B. Investors With Low to Moderate Risk Tolerance: Investors who have a low or moderate risk appetite may prefer investing in multi-asset allocation funds.


  1. How to invest in multi-asset allocation funds?

    Investment in mutual funds is only a few steps away. Here are the steps:
    A. Register with any reputed online investment platform/mutual fund company
    B. Open an account & complete KYC
    C. Select a mutual fund of your choice
    D. Choose the mode of investment i.e. lumpsum or SIP Investment
    E. Make the payment
    F. Review the performance periodically.

  2. What are some examples of multi-asset allocation funds?

    Here are some examples:
    1. Quant Multi Asset Fund
    2. Nippon India Multi Asset Fund
    3. HDFC Multi-Asset Fund

A commerce graduate turned a digital creator to follow his passion for writing and sharing useful & well-researched information that adds some value to people's lives.

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