Quant, ICICI & HDFC- 3 Best Multi Asset Allocation Funds for 2024: Top Performing in India

Synopsis:

Multi Asset Allocation Funds are hybrid mutual funds that invest in at least three asset classes, with a minimum 10% allocation, to generate modest capital appreciation while reducing portfolio risk. They offer diversification, tactical asset allocation, and are suitable for moderate investors with a 3-5 year investment horizon. The best performing funds for 2024 are Quant Multi Asset Fund, ICICI Pru Multi-Asset Fund, and HDFC Multi-Asset Fund.

Multi Asset Allocation Funds are hybrid mutual funds that invest in at least three asset classes with a minimum allocation of 10% in each. The objective is to generate modest capital appreciation while reducing overall portfolio risk by investing in low-correlated assets like equity, debt, and gold.

Some key points about Multi Asset Allocation Funds: –

They offer diversification and tactical asset allocation based on market conditions.

Risks include exposure to equity, debt, and commodity market fluctuations.

They are suitable for investors with a moderate risk appetite and 3-5 year investment horizon.-

The taxation depends on the equity exposure, with higher equity allocation taxed like equity funds.

The 3 best performing Multi Asset Allocation Funds for 2024 as:

1. Quant Multi Asset Fund

2. ICICI Pru Multi-Asset Fund

3. HDFC Multi-Asset Fund

These funds have delivered strong risk-adjusted returns over the past years through their dynamic and diversified investment approach.

The key risks involved in investing in Multi Asset Allocation Funds include:

1. Market Risks: Multi Asset Allocation Funds are exposed to market risks associated with equity, debt, and commodity markets. Fluctuations in these markets can impact the fund’s performance.
2. Asset Class Risks: Each asset class (equity, debt, gold, etc.) carries its own set of risks. For example, equities are subject to market volatility, while debt instruments are exposed to interest rate and credit risks.
3. Diversification Risks: While diversification aims to reduce risk, it can also limit the potential for high returns if one asset class significantly outperforms others.
4. Managerial Risks: The fund’s performance is influenced by the fund manager’s decisions and expertise. Inadequate management can lead to underperformance.
5. Taxation Risks: Tax implications can vary based on the fund’s equity exposure, which can impact the after-tax returns for investors.

These risks should be considered when evaluating Multi Asset Allocation Funds as part of an investment strategy.