An examination of 25 multi-asset funds has shown they have surpassed the performance of most general equity schemes over one, three, and five-year periods. These funds are distinguished by their ability to generate competitive returns across various asset classes, offering a diversified investment strategy that is often absent in single-asset equity funds, as per a report from Ventura Securities.
The growing appeal of Multi Asset Allocation Funds can be attributed to their capacity for diversification, potential tax advantages, and superior risk-adjusted returns.
“Certain Multi Asset Allocation Funds have outperformed the majority of equity schemes, highlighting the advantages these funds can offer. The analysis conducted by Ventura Securities emphasizes the significant benefits of multi-asset funds, including strong returns. These funds present appealing choices for investors aiming for a balanced risk-reward profile. Nevertheless, the differences in performance highlight the necessity of choosing funds that align with individual investment goals and risk tolerance, reinforcing the idea that a uniform approach is not suitable for all in multi-asset allocation,” says Juzer Gabajiwala, Director at Ventura Securities Ltd.
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Performance of select Multi Asset Allocation Funds and the percentage of equity schemes, each has outperformed
The Multi Asset Fund from Quant AMC has shown a notable performance, outperforming approximately 79% of equity schemes based on its 3-year returns and 86% over a 5-year period. Its allocation strategy, despite a controlled equity exposure of less than 51%, has proven successful in surpassing the returns of numerous equity funds. ICICI Prudential Multi Asset excelled, outperforming 63% of equity schemes’ returns over a 3-year period and nearly 50% over a 5-year timeframe.
No. of Equity Schemes [1 Year: 640, 3 Years: 458 & 5 Years: 366]
Asset Allocation strategies across all 25 Multi Asset Allocation Funds
The allocation strategies that exist across 25 multi-asset allocation funds show a huge variation, heavy on equity and debt along with a mix of gold and silver, arbitrage and other alternative assets. This diversity underscores the fact that ‘one size does not fit all’ as each fund follows a distinct strategy tailored to different market conditions and investor objectives.
Some funds have outperformed large-cap funds by delivering higher returns with lower associated risk.
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