What are the features of Multi-Asset Allocation Funds?

• Minimum 10% allocation in each of the three types of asset class

• Diversified portfolio generates good returns while keeping the risks low

• Suitable for investors who are looking for portfolio diversification and want to invest for a medium to long-term horizon

• Invest through SIPs or lump sum

What are the different types of hybrid funds?

What should be the investment horizon for Multi-Asset Allocation Funds?

• Most Multi-Asset Allocation Funds have a considerable exposure to equity

• Since equity faces a short-term volatility risk, investing for the medium or long-term horizon is suitable

• A horizon of 3 or more years is recommended

• It also helps in earning attractive returns

• If the scheme is equity-oriented, you also get tax benefits for staying invested for 12 or more months

What is the tax implication of Multi-Asset Allocation Funds?

• The tax implication depends on the portfolio composition

• If the Multi-Asset Allocation Fund has a minimum of 65% exposure to equity, it is eligible for equity taxable

• Under equity-oriented funds, returns earned within 12 months would be taxed at 15%

• Returns earned after 12 months would be tax-free up to Rs.1 lakh

• Excess returns would attract a 10% tax

• If the Multi-Asset Allocation Fund does not have a minimum of 65% equity exposure, it would attract debt taxation

• The returns earned are taxed at your income tax slab rates

• Dividends earned, if any, from either equity or debt-oriented funds are taxed at your income tax slab rate

What are the payout options?

• Dividend option

  Earn dividends on your investment at regular intervals

• Growth option

  Accumulate the returns over the investment tenure and get a lump sum amount on redemption

Who should invest in conservative hybrid funds?

• New investors

  You can protect against high volatility risks of equity by diversifying your portfolio with other asset classes

• Investors looking for good returns

  You can earn good returns with exposure to different types of assets in your portfolio.

• Investors with a medium to long-term horizon

  If you are looking to invest for 3 or more years, Multi-Asset Allocation Funds would be a suitable choice