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Investors beat volatility with asset allocation MFs
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Investors beat volatility with asset allocation MFs
TNN / May 3, 2021, 04:00 IST
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Mumbai: Extreme volatility in recent months in the three most popular asset classes for common people stocks, bonds and gold has prompted investors to lap up asset allocation funds. These mutual funds divide investors’ money in a judicious manner among the three asset classes.
The funds also try to provide protection from extreme volatility in the prices of these assets. Financial planners say these funds have historically given higher returns than fixed deposits (FDs), but at a lower risk.
Consider this: In the one year to March 2021, total assets managed by these funds jumped nearly 47% to Rs 15,551 crore. Investments in asset allocation fund of funds too grew, at an even faster rate of 61%, to Rs 11,475 crore, official data showed. In comparison, the total assets of the fund industry grew by 4
(This story originally appeared in on May 03, 2021)MUMBAI: Extreme volatility in recent months in the three most popular asset classes for common people stocks, bonds and gold has prompted investors to lap up asset allocation funds. These mutual funds divide investors’ money in a judicious manner among the three asset classes.
The funds also try to provide protection from extreme volatility in the prices of these assets. Financial planners say these funds have historically given higher returns than fixed deposits (FDs), but at a lower risk.
Consider this: In the one year to March 2021, total assets managed by these funds jumped nearly 47 per cent to Rs 15,551 crore. Investments in asset allocation fund of funds too grew, at an even faster rate of 61 per cent, to Rs 11,475 crore, official data showed. In comparison, the total assets of the fund industry grew by 41.4 per cent to Rs 31.4 lakh crore.
Motilal Oswal Asset Allocation Passive FoF - Investors can give it a skip
It will provide investors a static exposure to equity, debt and gold
If you want exposure to multiple assets – equity, debt and gold , you can consider asset allocation mutual fund schemes. Here, you have two options. One, multi asset allocation funds, that must invest 10 per cent or more in at least three different asset classes. Two, you can invest in an asset allocation fund of funds (FoF), that invests in a combination of equity, debt and other-asset focused mutual funds. Such schemes help investors in diversifying risk and reducing return volatility. The recently launched, Motilal Oswal Asset Allocation Passive FoF – Aggressive and Conservative – belongs to the latter category. The new fund offer closes on March 5.