Multi-asset funds 101: What you need to know

Multi-asset allocation funds are on cloud nine. This is reflected in their mushrooming asset base, which grew at a staggering 138 per cent in the last year, totalling nearly Rs 1 lakh crore (as of September 2024), including nine new fund offers (NFOs) that raked in Rs 7,700 crore this year. Moreover, these funds fetched a stellar 25 per cent return during the same period, further enhancing their appeal. Given their rising popularity among investors, we felt it was the right time to understand what multi-asset allocation funds are. So, without further ado, let's dive in! What are multi-asset allocation funds? Multi-asset allocation funds are hybrid funds that spread their investments across at least three asset classes, dedicating a minimum of 10 per cent to each, such as equities, debt and commodities like gold and silver. These funds can also invest in real estate, arbitrage and InvITs. With such a diversified approach, multi-asset funds act like the 'Swiss Army knife' of mutual fund investments, offering investors a flexible, all-in-one solution. What does