Earning from mutual funds, multi-asset funds are making huge profits!

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The recent Israel-Hamas conflict has sent the stock market into turmoil, with investors worried about where to put their money amid the uncertainty. In such a volatile environment, both foreign and Indian investors are considering investment strategies. If you find yourself worried about sudden changes in the market, don't panic. One option worth considering is investing in multi-asset mutual funds.

Market Trends:

As of September 2023, inflows into multi-asset allocation funds have increased to ₹6,324 crore, showing a significant increase of ₹4,707 crore from the previous month's inflow. Multi-asset allocation funds, also known as hybrid funds, allocate investments across at least three asset classes including equity, debt, commodity, etc.

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Benefits of Multi-Asset Fund:

As per SEBI regulations, multi-asset funds are required to invest a minimum of 10% of their total AUM in each of three or more asset classes at all times. To maximize potential gains, these funds should ideally have an adequate and well-defined allocation across each asset class.

Example of Advantage:

An excellent example of a well-performing multi-asset fund is the Nippon India Multi-Asset Fund. In the last year, the fund has delivered 19% returns allocating investments across Indian equities (50%), foreign equities (20%), commodities (15%), and debt (15%). Maintaining a consistent allocation strategy across the four asset classes has been a key feature of this fund, ensuring that investors get returns.

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SEBI Guidelines:

SEBI mandates that fund managers can allocate up to 10% each in debt and commodities, with the remaining 80% being allocated in equities. This strategic allocation ensures that investors generally benefit from diversification among asset classes.