Ankit Sharma
When it comes to investing in turbulent times, the go-to option is a hybrid category scheme. The beauty of hybrid investing is that the investment corpus is deployed across equity and debt or equity, debt and other asset classes based on their relative attractiveness.
Apart from equity and debt, if an investor is looking for exposure to gold as well, then one can consider multi asset category. As per the Securities and Exchange Board of India, multi asset funds are those mutual funds that invest in at least three asset classes with an investment of at least 10% of the corpus in the three asset classes. Given the ability to take exposure to various asset classes within a single fund, multi asset can be considered as the most flexible within hybrid category schemes.
At a time when the market volatility is increasing owing to the increasing uncertainties due to geo-political developments and conflicts, we believe that investors should be very cognizant of their portfolio asset allocation during times like these. Instead of focusing too much on equities, investors should look at other assets classes as well which includes debt, gold, real estate etc.
A multi asset strategy, given their dynamic rebalancing among asset classes, allows an investor to capitalise from the volatility much better which ultimately tends to deliver better risk adjusted return than a single asset strategy at this point in time. Furthermore, because of the diversified nature of the fund, it can be looked at as an all-weather investment solution which can be considered by investors across the risk appetite spectrum. Also, if you are an investor looking to deploy lump sum investment but are apprehensive due to the ongoing conflicts, do consider investing into a multi asset category scheme.
One of the oldest fund and a consistent performer in this category is the ICICI Prudential Multi Asset Fund. The fund has a 21-year track record. A lump sum investment of Rs. 10 lakhs at the time of inception (October 31, 2002), as of September 30, 2023, would be approximately worth Rs. approximately 5.49 crore i.e. a CAGR of 21%. A similar investment in Nifty 50 would have yielded a CAGR of 16.8% approximately Rs. 2.6 crores.
(The writer is Co-Founder,
Financial Mart).