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As the new year is approaching, the question in the minds of investors is which mutual funds will be on top in 2025? Where will they get strong returns on investment? If you are also looking for the answer to this question, then multi-asset mutual fund can be a better option. Let us know why multi-asset mutual funds can give great returns and reduce risks in the new year.
Flexibility with fund managers
What makes a multi-asset fund different is that it allows fund managers to customize the portfolio. For example, in the equity segment, a fund manager can invest in largecap, midcap and smallcap stocks, ensuring the right mix of stability and high growth opportunities. Similarly, in the debt segment, the fund manager can adjust the tenure depending on market conditions and invest in government securities or high quality corporate bonds. Multi asset funds allow all the options to be fulfilled in a single investment option.
Why Invest in Multi Asset Funds?
Multi asset funds provide a one-stop solution for building a complete portfolio. Balanced allocation across asset classes minimizes risks by ensuring consistent and stable returns. Multi-asset funds take advantage of the fact that asset classes often perform differently in different market conditions. Historically, data shows that investing in gold along with equity and fixed income allocations improves portfolio performance. This strategy reduced the probability of negative returns, while increasing the probability of returns greater than 10 percent. While past performance does not guarantee future results, the analysis shows that gold is an effective option for portfolio diversification and can contribute significantly to portfolio performance.
Let us understand with an example how this fund works?
If you want to reduce investment risk and diversify then multi estate fund is the best option. Baroda BNP Paribas Multi Asset Fund is an example of how a portfolio comprising different asset classes can deliver strong risk-adjusted returns, putting you on the path to financial success. Baroda BNP Paribas Multi Asset Fund combines the growth potential of equities, debt stability, gold diversification and income potential of units of REITs/InvITs. This unique blend acts as a multivitamin for your portfolio, providing essential nutrients for continued portfolio health and performance. Apart from this, multi asset funds like Quant Multi Asset Fund Direct-Growth, ICICI Prudential Multi Asset Fund Direct-Growth, UTI Multi Asset Allocation Fund Direct-Growth have given excellent returns.
Since its inception, the fund has delivered a strong return of 19.98 per cent per annum, outperforming its benchmark’s return of 18.91 per cent per annum. Talking about the portfolio allocation till November 30, 20024, about 69 percent is in equities, 15 percent in gold and 16 percent in debt and cash. The objective of this fund is to take advantage of the uptrend in each asset class while minimizing portfolio losses during market fluctuations.
