Mutual Fund SIP, Investing in Multi Asset Funds: The trend of investing in mutual funds has increased a lot among the common investors of the country in the last few years. They are considered a better way to invest money especially in the equity market. But there are also such mutual fund schemes through which you can invest not only in equity but also in every asset class from debt, gold, silver to currency and real estate investment trusts. Investing by dividing your capital into different categories gives the benefit of diversification, which reduces the risk and increases the chances of getting balanced returns in the long term.
How do retail investors diversify?
One question is how can retail investors, whose investment size is small, invest in multiple asset classes simultaneously to take advantage of diversification? The answer to this question is Multi Asset Allocation Funds or Multi-Asset Funds. The portfolio of these funds includes all the asset classes that we have mentioned above. Therefore, even a small amount invested in them can give the benefit of investing in different asset classes.
How much return did you get in the last 5 years
You can see here the details of how much returns the leading multi asset allocation funds have given on investments made through lump sum and systematic investment plan (SIP) during the last 5 years. All the figures are for the direct plans of these schemes, in which the returns are usually slightly higher than the regular plans.
1. Quant Multi Asset Fund – Direct Plan
Average annual return on lump sum investment in last 5 years: 30.26%
Annualized return on SIP in last 5 years: 31.89%
Expense Ratio : 0.62 %
Asset Under Management (AUM): Rs 2,695.98 crore
Also read: Mutual Fund Return: This is how 50 thousand rupees became 5 lakhs! Nippon India’s ETF gave bumper return in 5 years
2. ICICI Prudential Multi Asset Fund – Direct Plan
Average annual return on lump sum investment in last 5 years: 23.19%
Annualized return on SIP in last 5 years: 26.08%
Expense Ratio : 0.73 %
Asset Under Management (AUM): Rs 47,442.90 crore
Also read: SBI Mutual Fund’s scheme to turn 1 lakh into 5 lakh, SIP of just Rs 1100 did wonders in 5 years
3. HDFC Multi Asset Fund – Direct Plan
Average annual return on lump sum investment in last 5 years: 18.48%
Annualized return on SIP in last 5 years: 18.83%
Expense Ratio : 0.77 %
Asset Under Management (AUM): Rs 3,452.53 crore
Also read: Mutual Fund SIP: 1 crore fund created from SIP of Rs 2500, tax exemption received in ‘bonus’, for whom is this scheme right
4. UTI Multi Asset Allocation Fund – Direct Plan
Average annual return on lump sum investment in last 5 years: 17.98%
Annualized return on SIP in last 5 years: 22.15%
Expense Ratio : 0.97%
Asset Under Management (AUM): Rs 3,270.54 crore
5. Axis Multi Asset Allocation Fund – Direct Plan
Average annual return on lump sum investment in last 5 years: 16.54%
Annualized return on SIP in last 5 years: 16.44%
Expense Ratio : 1.07 %
Asset Under Management (AUM): Rs 1,297.38 crore
6. SBI Multi Asset Allocation Fund – Direct Plan
Average annual return on lump sum investment in last 5 years: 16.20%
Annualized return on SIP in last 5 years: 18.03%
Expense Ratio : 0.53 %
Asset Under Management (AUM): Rs 5,767.47 crore
Risk is reduced, but not eliminated
Overall, if you are looking for a balanced and diversified option for investment amid market volatility, then multi-asset funds can be a good option. If more than 65% of the multi-asset fund you are going to invest in is invested in equity, then investing in it can also give you the benefit of tax exemption like equity funds. But also keep in mind that diversification in multi-asset funds reduces the risk, but does not eliminate it completely. These funds also invest a large part of their corpus in equity for better returns. Therefore, check your risk-taking capacity thoroughly before investing in them.
(Disclaimer: Investment in mutual funds is directly affected by the fluctuations in the stock market. Our aim is not to advise investing in any fund, but only to provide information. Take any investment decision only after consulting your investment advisor.)
