By Gurupad Parsi,
Mutual Fund Distributor, Goa
The strategy of multi-asset investing ensures there is suitable allocation to various asset classes throughout the course of one’s investment journey. This strategy takes care of a lot of investment basics and at the same time yields risk-adjusted and inflation-beating returns while fulfilling financial goals.
There are certain benefits in multi-asset investing which investors may not be able to have if invested only in one asset class. Following are the benefits which make multi-investing a ‘must have’ in one’s portfolio.
a) Optimal Diversification: Diversification is one of the basic keys for successful investment. The multi-asset investing strategy spreads your corpus across asset classes, and thus the portfolio is diversified. As a result, concentration risk is substantially reduced. Having a diversified portfolio enables you to overcome the high-risk factor of asset classes like equity, while also helping you earn better returns than comparatively stable assets like debt.
b) Flexibility to meet targets: When you consider an investment, you always have a purpose attached to it. It could be for buying a car, a home or your early retirement. Since multi-asset investing involves all major asset categories, your investment has the flexibility that is required to attain your goals. In a stable scenario, the strategy can help you obtain high returns from equities and, in a volatile phase, you can minimise losses due to the safety offered by the debt and gold components.
c) Active management: Through a multi-asset mutual fund, an investor gets access to an actively managed portfolio by a professional. Hence, one need not face unnecessary risk or stress of managing investments. Whatever the situation be, the experienced fund managers are prepared to shift your corpus among the asset classes required, thus offering you the full benefit of market fluctuations.
This combination over the long term offers a good investment experience for investors. Historical investment trends suggest that those who exercised a multi-investing approach emerged wealthier while effectively riding various market cycles. While there are several multi-asset funds on offer by various fund houses, one of the most recognized fund in the category is the ICICI prudential Multi-Asset Fund.
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