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A Multiple Asset Fund (or Multi-Asset Fund) is a type of mutual fund that invests in a mix of asset classes such as:
Equity (Stocks) – For capital appreciation
Debt (Bonds, Fixed Income) – For stability and regular income
Gold/Commodities/REITs (Real Estate Investment Trusts) – For diversification and inflation hedge
These funds are designed to balance risk and returns by investing in different asset classes based on market conditions.
Merits of Multiple Asset Funds
✅ Diversification: Spreads risk across different asset classes, reducing volatility.
✅ Balanced Risk-Return: Provides equity growth potential with debt stability.
✅ Market Adaptability: Fund managers adjust allocation based on market trends.
✅ Hedge Against Inflation: Gold and commodities act as a safeguard against inflation.
✅ Lower Volatility: Compared to pure equity funds, these funds experience lower fluctuations.
Demerits of Multiple Asset Funds
❌ Moderate Returns: Returns may not match pure equity funds in the long term.
❌ Fund Manager Dependency: Success depends on how well the fund manager allocates assets.
❌ Expense Ratio: Fees may be higher due to active management across multiple assets.
❌ Tax Complexity: Different assets in the fund may attract different tax treatments.
Who Can Invest in Multiple Asset Funds?
✔ Moderate Risk Investors: Suitable for investors who want exposure to equities but with lower risk.
✔ Long-Term Investors: Ideal for people with a 5+ years investment horizon.
✔ First-Time Investors: Those new to mutual funds who want diversification in a single fund.
✔ Investors Seeking Stability: Suitable for those looking for a mix of growth and safety.
Taxation of Multiple Asset Funds in India (as per current rules)
Equity-Dominated Fund (65%+ in Equity)
Short-Term Capital Gains (STCG) (held <1 year) – 15% tax
Long-Term Capital Gains (LTCG) (held >1 year) – 10% tax on gains above ₹1 lakh
Non-Equity Funds (Debt-heavy or 3+ Asset Classes)
Gains taxed as Short-Term Capital Gains (STCG) at slab rates
No indexation benefit on LTCG (taxed at 20% without indexation)
Dividend Taxation
Dividends are added to investor’s income and taxed as per individual tax slab.
