Multi-Asset Funds Soar: AUM Reaches New Heights amid Market Volatility
Multi-asset allocation funds have seen a surge in assets under management (AUM) following the shift in debt fund taxation in 2023. This growth is expected to continue, especially if equity market volatility persists. These funds diversify investments acro
Multiasset FundsAum GrowthMarket VolatilityAsset AllocationReitsReal EstateJan 26, 2025
This trend continued in 2024, with assets under management (AUM) nearly doubling over the year.
AUM, which was Rs 52,869 crore at the beginning of 2024, surpassed the Rs 1 trillion mark for the first time in November of the same year.
The asset growth in multi-asset funds has been driven by strong inflows and a series of new fund launches.
These funds are designed to diversify investments across various asset classes, including equity, debt, commodities (such as gold and silver exchange-traded funds), and units of real estate investment trusts (REITs) and infrastructure investment trusts (InvITs).
Many of these funds also use derivatives to manage risk and enhance returns.
The industry is optimistic about the future growth of multi-asset funds, especially if equity market volatility continues.
This diversification helps investors manage risk more effectively and provides a balanced approach to investment.
on Multi-Asset FundsMulti-asset funds are investment vehicles that allocate resources across multiple asset classes.
This diversification helps to spread risk and can potentially lead to more stable returns.
These funds are particularly attractive to investors who are looking for a balanced portfolio without the need to manage individual assets.
The shift in debt fund taxation in April 2023 played a significant role in the growth of multi-asset funds.
The changes in tax rules made it less attractive for investors to hold pure debt funds, prompting a shift towards multi-asset allocation funds.
Key Features of Multi-Asset Funds1.
Diversification These funds invest in a mix of equities, debt, commodities, and other asset classes, helping to reduce the impact of market volatility.2.
Professional Management The fund managers are responsible for making investment decisions, which can be particularly beneficial for retail investors who may not have the time or expertise to manage their own portfolios.3.
Flexibility Multi-asset funds can adjust their asset allocation based on market conditions, providing a dynamic approach to investment.4.
Risk Management The use of derivatives and other risk management tools can help protect the portfolio from adverse market movements.
Boilrplate XYZ Investment ManagementXYZ Investment Management is a leading asset management company with a strong focus on multi-asset funds.
Founded in 2005, the company has a track record of delivering consistent returns to its investors.
XYZ Investment Management offers a range of multi-asset funds, each tailored to meet the specific needs of different investor profiles, from conservative to aggressive.
Future OutlookThe future looks bright for multi-asset funds, especially given the current market conditions.
The industry expects continued strong inflows and the launch of new funds, which should further drive AUM growth.
As more investors recognize the benefits of diversification and professional management, the popularity of multi-asset funds is likely to increase.
ConclusionMulti-asset funds have proven to be a valuable addition to the investment landscape, offering a balanced and diversified approach to portfolio management.
With the expected continuation of market volatility, these funds are well-positioned to attract more investors and continue their upward trajectory.
Frequently Asked Questions
What are multi-asset allocation funds?
Multi-asset allocation funds are investment vehicles that allocate resources across multiple asset classes, including equities, debt, commodities, and real estate investment trusts (REITs) or infrastructure investment trusts (InvITs). This diversification helps to spread risk and can lead to more stable returns.
What caused the growth in multi-asset funds in 2024?
The growth in multi-asset funds in 2024 was driven by strong inflows and a series of new fund launches. The shift in debt fund taxation in April 2023 also played a significant role, making multi-asset funds more attractive to investors.
How do multi-asset funds manage risk?
Multi-asset funds manage risk through diversification across various asset classes and the use of derivatives and other risk management tools. This helps to protect the portfolio from adverse market movements and provides a more stable investment experience.
What is the expected future of multi-asset funds?
The future of multi-asset funds looks bright, with the industry expecting continued strong inflows and the launch of new funds. As more investors recognize the benefits of diversification and professional management, the popularity of these funds is likely to increase.
What are the key features of multi-asset funds?
Key features of multi-asset funds include diversification across various asset classes, professional management, flexibility in asset allocation, and risk management through the use of derivatives and other tools.
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