A multi-asset fund is an all-weather proposition for conservative investor, says Sailesh Raj Bhan

economictimes.indiatimes.com:

gold prices have rallied to record highs. And this pattern has repeated many times in the past decades as well. The domestic economy is expected to continue on its healthy growth path, led by government and private sector capex spending, though advanced economies still face high inflation and slowing growth. Along with the challenges of geopolitics, all these factors leave a retail investor highly confused on how to make an asset allocation decision – apportioning money across equity (domestic & International), debt and gold (may be REITs and silver as well).

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That’s where a multi-asset allocation fund works well to ensure a diversified portfolio with ingredients that have a very low correlation with each other’s movements and ensure optimal risk-adjusted returns over the long term. These funds invest in a blend of equity, debt and gold, and are suitable for investors with a modest risk appetite and for beginners looking to build a diversified portfolio.A multi-asset strategy works for investors Stocks, bonds and commodities such as gold and silver move in different directions at various times. Historically it has been observed that the movement of these asset classes have low or negative correlation with each other. The correlation coefficient tells us how price movements in two assets fluctuate in relation to each other. Equity and debt have negative correlation. Same is the case with equity and gold and also debt and gold. A negative correlation means that they move in opposite directions. Thus, when a multi-asset portfolio with a right mix is added to a retail investor’s portfolio, the risk is considerably