Investors bet on fund managers' asset allocation skills like never before

economictimes.indiatimes.com:

The category has seen assets under management almost double to Rs 40,000 crore from Rs 20,840 crore in the last one year.

Financial planners believe since this product gives exposure to different asset classes, it comes in with lower volatility compared to pure equity funds and is a good starting point for many first-time investors or those looking to make lumpsum investments with tax efficiency.

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“It is a core product for those investors who do not want to manage active asset allocation on their own,” said Nirav Karkera, head of research at Fisdom. With debt yields high and equities having run up, investors looking to make lumpsum investment with tax efficiency are using multi-asset funds, he said.

New fund offers (NFOs) from fund houses and a change in taxation rules post April has also led to a surge in assets in this category over the last one year, distributors said.

Over the last 6-10 months, there have been new fund offers from Kotak, Aditya Birla Sunlife, Whiteoak, DSP Mutual Fund and Edelweiss in this category.

Some multi-asset funds including those of HDFC Bank, ICICI Bank, and Kotak give investors the benefit of equity taxation, while others like Nippon, Whiteoak, DSP and Edelweiss offer them debt taxation with indexation benefits.