11 hrs ago
Experts recommend multi-asset funds amid heightened market uncertainty
Markets can move up and down quickly when the economy and global politics are uncertain.
Indian shares have performed poorly this year, while gold prices have increased.
A multi-asset fund spreads money across different types of investments.
These usually include shares, bonds and precious metals such as gold or silver.
The idea is that when one investment performs poorly, another may do better.
Experts believe this can make returns steadier and reduce large losses.
They especially recommend this approach for conservative or average-risk investors.
However, the funds still invest in markets that can rise or fall.
India’s Nifty has fallen nearly 11% year-to-date, while domestic spot gold prices have risen 14%.
Multi-asset allocation funds attracted ₹3,670.97 crore in net inflows during August.
These funds must invest in at least three asset classes, with at least 10% in each.
Experts say combining equities, debt and precious metals may reduce portfolio volatility.
Nippon’s multi-asset fund led three-year returns at about 19% CAGR, followed by funds from White Oak, SBI and ICICI Prudential.
- Who
- Mutual fund investors and experts including V K Vijayakumar, G Chokkalingam and DD Sharma.
- What
- Investors are considering multi-asset allocation funds to diversify portfolios during market uncertainty.
- Where
- India’s financial markets.
- When
- The recommendation reflects current conditions, with August mutual fund inflow data cited.
- Why
- Weak equity performance, geopolitical uncertainty, macroeconomic pressures, elevated oil prices, possible inflation and currency weakness are increasing market risks.
Key facts
- Nifty performance
- The equity benchmark Nifty is down nearly 11% year-to-date.
- Gold performance
- Domestic spot gold prices are up 14% year-to-date.
- August inflows
- Multi-asset allocation funds received ₹3,670.97 crore in net inflows.
- Fund structure
- Funds must invest in at least three asset classes, with a minimum of 10% allocated to each.
- Typical assets
- The funds commonly combine equity, debt and gold or silver.
- Top cited return
- The Nippon Multi Asset Allocation Fund delivered about 19% CAGR over three years.
- Other cited returns
- Three-year returns were nearly 17% for White Oak Capital, 15% for SBI and 14% for ICICI Prudential funds.
Quotes
V K Vijayakumar
Chief Investment Strategist at Geojit Investments
“An ideal strategy in the current context is to opt for multi-asset funds investing in stocks, debt instruments and precious metals like gold and silver. Such funds can deliver stable returns with the least volatility.”
livemint.com
“A multi-asset allocation strategy which focuses on equity, debt, as well as on precious metals and even on ETFs of other safer economies could be beneficial for investors at this juncture.”
livemint.com
Sources
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