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Writer's pictureKaustubh Kale

Multi-Asset Funds: The Ideal Investment for Diwali

As the festive season of Diwali approaches, many investors look for auspicious opportunities to grow their wealth. With its deep-rooted association with prosperity and success, Diwali is the perfect time to reassess and enhance your financial portfolio. Mutual funds are a highly accessible asset class, allowing you to invest any amount that suits your comfort level—whether it’s 1,000 or ₹1 crore. Importantly, because they don't solely invest in equities; they offer diversified assets within a single mutual fund scheme itself. We are talking about ‘multi-asset funds’ that stand out as an ideal choice, particularly during this festival of wealth. Multi-asset funds invest across equities, debt, and gold offering a balanced mix.


Diversification for Balanced Growth

Multi-asset funds allocate investments across three key asset classes: equities, debt, and gold. This diversification offers a balanced approach to wealth accumulation, allowing investors to tap into the growth potential of the stock market while hedging risks with safer options like debt and gold. During volatile market conditions, the ability of these funds to spread investments across different asset types helps minimize risk and ensure more stable returns.


Gold: A Festive Favourite

Gold holds a special place in the hearts of Indians, particularly during festivals like Diwali. It is considered a symbol of wealth, prosperity, and good fortune. Purchasing gold during Diwali is a tradition that has been passed down for generations, as it is believed to bring prosperity into the home. Multi-asset funds cater to this cultural sentiment by including gold as a core component of their portfolio, allowing investors to maintain a traditional touch in their investments while also benefiting from its value as a safe-haven asset. These funds allow you to capitalize on its potential for appreciation while enjoying the emotional connection it holds.


Adapting to Market Changes

What makes multi-asset funds particularly appealing is their asset allocation flexibility to adapt to market fluctuations. The fund manager can shift the balance between equities, debt, and gold based on prevailing market conditions. For instance, when stock markets become overvalued, they may increase exposure to gold and debt, both of which tend to perform better in uncertain times. This adaptability ensures that your portfolio remains resilient, no matter how the markets move.


Professionally Managed

For those looking to invest during Diwali without the time or expertise to actively manage their portfolios, multi-asset funds offer a hassle-free solution. The fund managers and asset management companies are well-placed to manage your money.


In conclusion, with their strategic mix of equities, debt, and gold, multi-asset funds are the perfect investment choice this Diwali. They offer stability, growth, and an emotional connection to the traditional value of gold, aligning with the spirit of the festival and the goals of long-term financial prosperity.


(The author is a Chartered Accountant and CFA (USA). Financial Advisor. Views personal.)

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