3 Best Multi Asset Allocation Funds for 2024 Page 1

Index
PAGES

1. What are Multi Asset Allocation Funds? 03

2. Why consider investing in Multi Asset Allocation Funds in 2024? 04

3. What are the advantages of investing in Multi Asset Allocation Funds? 04

4. What are the risks involved in Multi Asset Allocation Funds? 05

5. Who should consider investing in Multi Asset Allocation Funds? 05

6. How are Multi Asset Allocation Funds taxed? 06

7. Which are the best Multi Asset Allocation Funds for 2024? 06

3 Best Multi Asset Allocation Funds for 2024 Page 2

Multi Asset Allocation Funds offer investors an opportunity to get tactical asset allocation across multiple asset classes
and thereby benefit from diversification. Allocation of assets across classes such as equity, debt, gold, and even holding
optimal cash is an important strategy that helps investors balance risk-reward by adjusting the proportion of each asset
in the investment portfolio.

In this guide we will reveal the list of the Best Multi Asset Allocation Funds for 2024. But first, let’s find out more about
the basics of the category.

What are Multi Asset Allocation Funds?

Multi Asset Allocation Funds are hybrid mutual funds that are mandated to invest in at least three asset classes with a
minimum allocation of at least 10% in each. The investment objective of Multi Asset Allocation Fund is to generate
modest capital appreciation while trying to reduce overall risk to the portfolio from a combined portfolio of low-
correlated assets (usually equity, debt, and gold).

Examples of Multi Asset Allocation Mutual Funds in India

Scheme Name AUM (Rs Crore)

ICICI Pru Multi-Asset Fund

34,704
Kotak Multi Asset Allocation Fund 5,126
SBI Multi Asset Allocation Fund 3,879
Aditya Birla SL Multi Asset Allocation Fund
3,055
Nippon India Multi Asset Fund
2,703
HDFC Multi-Asset Fund
2,527
Tata Multi Asset Opp Fund 2,501
Sundaram Multi Asset Allocation Fund 1,988
Quant Multi Asset Fund
1,677
DSP Multi Asset Allocation Fund
1,435

The securities quoted are for illustration only and are not recommendatory.
AUM data as of February 29, 2024
(Source: ACE MF, data collated by PersonalFN)

Fund managers of Multi Asset Allocation Fund have the flexibility to dynamically allocate investments in different asset
classes by looking at a variety of factors such as:

- Price/Earnings Ratio of equities relative to historical averages

- Interest rate outlook

- Macroeconomic factors prevailing in India and globally

- The quality of securities

By dynamically diversifying investments in asset classes that share a low positive correlation, Multi Asset Allocation
Funds protect the downside risk by tactically investing across asset classes and be truly balanced.

3 Best Multi Asset Allocation Funds for 2024 Page 3

Why consider investing in Multi Asset Allocation Funds in 2024?
The year 2023 saw most asset classes generating superlative returns. While there are assumptions of the positive
momentum continuing in 2024 due to strong macro and corporate fundamentals, investors should set realistic
expectations of returns.

Due to the uncertain global environment that we are currently witnessing, one or more asset classes could experience
high volatility in the near future. Therefore, diversifying investments across asset classes can prove to be a prudent
strategy that can minimise the risk portfolio volatility.

Different asset classes react differently to the varying macro-economic situation, sometimes equities outperform and
other times, it could be debt or gold. So, when one invests across multiple asset classes, the impact of any sharp
negative movement in one asset class will be mitigated by the likely rise in other asset classes. It is noteworthy that not
all asset classes move in the same direction at the same time.

[Read: How a Multi-Asset Fund Can Protect Your Portfolio at a Market High]

Diversification across asset classes can result in optimal risk-adjusted returns

Data as of April 04, 2024

(Source: ACE MF, MCX, PersonalFN Research)

The low correlation among assets enables Multi Asset Allocation Funds to protect the downside risk better during
uncertain economic conditions and volatile markets, and generate better risk-adjusted returns, compared to investing in
just one asset class.

Therefore, by diversifying across multiple asset classes, the portfolio will be able to preserve the value of investors’
capital across market phases more effectively as well as earn decent risk-adjusted returns in 2024 and beyond.

What are the advantages of investing in Multi Asset Allocation Funds?

There are various advantages of investing in Multi Asset Allocation Funds as listed below:

1. Facilitates diversification across asset classes, which reduces the downside risk and optimises gains.

2. Enables timely portfolio rebalancing based on the performance and the outlook of each underlying asset by a
professional fund manager.

3. Provides relief from timing and monitoring asset markets.

4. Benefit from the strong research capabilities of a fund management team.

5. Investors earn stable returns across market phases.

3 Best Multi Asset Allocation Funds for 2024 Page 4

 How Multi Asset Allocation Funds fared over various market phases

Past performance is not an indicator for future returns.

Data as of April 04, 2024
(Source: ACE MF, data collated by PersonalFN)

Moreover, asset allocation is not static; it is dynamic. This means that the asset allocation is reviewed regularly, and
necessary portfolio changes are made based on the fund manager’s analysis of the influencing factors.

The fund managers of a Multi Asset Allocation Fund have much leeway in building a suitable portfolio based on the
market conditions. The equity portion can be invested across market caps and sectors, while the debt portion can be
invested across duration and credit profiles. In terms of gold, the investments are usually in Gold ETFs and Gold
Exchange Traded Commodity Derivatives (ETCD). The balance can be allocated in cash and cash equivalents. Some Multi
Asset Allocation Funds also hold exposure to Derivatives, REITs & InvITs, Silver, and Overseas equities.

What are the risks involved in Multi Asset Allocation Funds?

Depending on the composition of the portfolio and the dominant asset class, a Multi Asset Allocation Fund may be
exposed to various risk factors. The equity component may be vulnerable to market fluctuations, liquidity, and
concentration risks; the debt component may be influenced by the prevailing interest rate scenarios, liquidity, and
credit profile, while the gold component (or any other commodity) can be affected by the prices of the commodity.

However, over the long run, the fund managers of a Multi Asset Allocation Fund can potentially manage risk and returns
by efficiently balancing the portfolio to capitalise on the market opportunities.

It is also noteworthy that Multi Asset Allocation Funds have limited upside potential due to lower allocation to equities.
Therefore, they may underperform pure equity funds during phases of secular bull run in the equity market.

Who should consider investing in Multi Asset Allocation Funds?

Multi Asset Allocation Funds are suitable for investors seeking long-term capital appreciation, have a moderately high-
risk appetite, and have an investment time horizon of 3 to 5 years. They are also suitable for novice investors and
investors who do not want to assume high risk but are looking to earn steady returns on their investments. Investors
must ensure that they choose a suitable Multi Asset Allocation Fund that aligns with their personal asset allocation plan.

Watch this video to know about the 5 best mutual fund types for long-term investment:

3 Best Multi Asset Allocation Funds for 2024 Page 5

How are Multi Asset Allocation Funds taxed?
The taxation of Multi Asset Allocation Funds depends on their equity exposure. If a Multi Asset Allocation Fund
maintains an exposure of minimum 65% in domestic equities over the past 12 months, then the scheme is taxed like an
equity fund, else it is taxed like a debt fund. The following table shows the tax treatment for different Multi Asset
Allocation based on their exposure to domestic equities:

Domestic equity exposure Short-term capital gains Long-term capital gains

Up to 35% As per investor’s tax slab As per investor’s tax slab

For a holding period of more than three

Between 35-65% As per investor’s tax slab years, taxed at 20% with indexation
benefit

For a holding period of more than one

Above 65% Taxed at 15% year, taxed at 10% (if the gains are
above Rs 1 lakh)

Thus, given the dynamic nature of Multi Asset Allocation Fund, it is important that investors stay informed about the tax
implications of the scheme they invest in.

Which are the best Multi Asset Allocation Funds for 2024?
Absolute
CAGR (%) Ratio
Scheme Name (%)
1 Year 3 Years 5 Years 7 Years SD Annualised Sharpe Sortino
Quant Multi Asset Fund 21.81 33.09 24.12 17.97 16.07 0.44 0.96
ICICI Pru Multi-Asset Fund 22.44 27.04 17.53 16.29 9.28 0.53 1.20
HDFC Multi-Asset Fund 16.25 17.35 13.62 11.59 7.06 0.38 0.78
Category average 16.16 18.41 15.26 13.07 9.09 0.35 0.74
CRISIL Hybrid 35+65 - Aggressive
Index 14.85 15.96 12.86 12.55 9.52 0.23 0.49

Past performance is not an indicator for future returns

Data as of April 04, 2024. Direct plan - Growth option considered; Returns are on a rolling basis and in %
Risk ratios are calculated over a 3-year period assuming a risk-free rate of 6% p.a.
(Source: ACE MF, data collated by PersonalFN)

3 Best Multi Asset Allocation Funds for 2024 Page 6

Best Multi Asset Allocation Fund #1: Quant Multi Asset Fund

Quant Multi Asset Fund focuses on dynamic management of the portfolio across equity, debt, and gold to navigate the
tides of volatility with an aim to offer superior risk-adjusted returns. The scheme follows the fund house's proprietary
VLRT framework to determine allocation into each of the three asset classes.

Quant Multi Asset Fund predominantly invests in equities with remaining in gold and debt. In the last one year, the
fund's allocation to equities has ranged between 38-66%, 5-20% in Derivatives – Futures, 6-12% in debt instruments and
about 10-35% in Gold ETFs. Despite being a small-sized scheme, Quant Multi Asset Fund has registered superior growth
across most time frames. In the last 5 years, Quant Multi Asset Fund’s NAV has grown at a CAGR of 24.1% on a rolling
return basis.

Fund Snapshot – Quant Multi Asset Fund

Scheme Details Top holdings Asset Type % of assets

AUM (Rs Cr) 1,677 JIO Financial Services Ltd. Equity 9.67
Inception date 20-Mar-01 Reliance Industries Ltd. Equity 9.55
Returns since inception (CAGR%) 11.66% Orchid Pharma Ltd. Equity 8.90
NAV 127.05 Housing & Urban Development Corporation Ltd. Equity 5.19
Expense ratio 2.01% Adani Power Ltd. Equity 4.62

Past performance is not an indicator of future returns. The securities quoted are for illustration only and are not recommendatory.
Portfolio data as of February 29, 2024
Returns and NAV data as of April 04, 2024. Regular Plan - Growth Option considered
(Source: ACE MF, data collated by PersonalFN)

Quant Multi Asset Fund is quick in its approach to shift allocation across market caps, sectors, and asset classes,
depending on the market dynamics. Accordingly, the fund's turnover ratio is usually higher at up to 300%. This strategy
can enable Quant Multi Asset Fund to limit downside risk during uncertain and depressed market conditions, and also
participate well during market uptrends.

Even though the volatility registered by the fund is higher compared to its peers, it has compensated its investors well
by ranking high in terms of risk-adjusted returns.

Best Multi Asset Allocation Fund #2: ICICI Pru Multi-Asset Fund
ICICI Pru Multi-Asset Fund is the erstwhile ICICI Pru Dynamic Plan that is now categorised under Multi-Asset Funds.
Under its current mandate, the fund invests predominantly in equities, having an average exposure of about 70% in the
segment. The fund manager adopts a contrarian approach by remaining underweight in those sectors to which the
larger market holds an elevated exposure.

ICICI Pru Multi-Asset Fund has a track record of performing exceptionally well during bull market phases, even though it
has often struggled during bearish phases. Notably, the fund has registered a growth of 21.5% CAGR since its inception
in October 2002. Its superior performance over various time frames in the past has attracted investors’ attention,
making it the largest fund in the Multi-Asset Allocation category.

Fund Snapshot – ICICI Pru Multi-Asset Fund

Scheme Details Top holdings Asset Type % of assets
AUM (Rs Cr) 34,704 ICICI Bank Ltd. Equity 5.71
Inception date 31-Oct-02 NTPC Ltd. Equity 4.74
Returns since inception (CAGR%) 21.45% HDFC Bank Ltd. Equity 4.47
NAV 644.53 Government of India Debt 3.80
Expense ratio 1.54% Maruti Suzuki India Ltd. Equity 3.76

Past performance is not an indicator of future returns. The securities quoted are for illustration only and are not recommendatory.
Portfolio data as of February 29, 2024
Returns and NAV data as of April 04, 2024. Regular Plan - Growth Option considered
(Source: ACE MF, data collated by PersonalFN)

3 Best Multi Asset Allocation Funds for 2024 Page 7

ICICI Pru Multi-Asset Fund aims to generate capital appreciation and income by investing across asset classes. In the last
one year, the fund held an average allocation of 65% of its assets in equities, derivative instruments such as Futures &
Options, 10-15% in debt and money market instruments, with the balance in Gold ETFs / Futures, Silver Futures, REITs &
InvITs, and cash.

The fund has a veteran fund manager, Mr Sankaran Naren, at the helm, who is known for his contrarian and value picks.
With this, ICICI Pru Multi-Asset Fund has the potential to steadily generate market-beating returns over complete
market cycles.

Best Multi Asset Allocation Fund #3: HDFC Multi-Asset Fund

Launched in August 2005, HDFC Multi-Asset Allocation Fund was earlier known as HDFC Multiple Yield Fund and
categorised as a Monthly Income Plan, under which it invested predominantly in debt instruments with some allocation
to equities. However, post SEBI’s categorisation norms for mutual funds, the scheme was reclassified as a multi-asset
fund.

The fund now holds an equity-oriented portfolio, investing at least 65% of its assets. The fund also holds a minimum
allocation of 10% each in debt and gold to reduce the portfolio volatility. Despite a drastic change in its investment
mandate in 2018, the fund has performed fairly well post recategorisation, and has the potential to do so in the future
as well. In the last 5 years, HDFC Multi-Asset Fund’s NAV has grown at a CAGR of 13.6% on a rolling return basis. HDFC
Multi-Asset Allocation Fund appears well-placed in terms of portfolio characteristics and has the potential to outpace
the benchmark and its peers over the long run.

Fund Snapshot – HDFC Multi-Asset Fund

Scheme Details Top holdings Asset Type % of assets

AUM (Rs Cr) 2,527 Government of India Debt 9.03
Inception date 17-Aug-05 HDFC Bank Ltd. Equity 6.20
Returns since inception (CAGR%) 10.29% Axis Bank Ltd. Equity 4.48
NAV 62.12 ICICI Bank Ltd. Equity 3.75
Expense ratio 2.01% State Bank Of India Equity 3.31

Past performance is not an indicator of future returns. The securities quoted are for illustration only and are not recommendatory.
Portfolio data as of February 29, 2024
Returns and NAV data as of April 04, 2024. Regular Plan - Growth Option considered
(Source: ACE MF, data collated by PersonalFN)

HDFC Multi-Asset Allocation Fund aims to invest in a diversified portfolio of equity and equity-related instruments, debt
instruments, gold ETFs, REITs & InvITs, and cash based on prevailing market conditions. The fund manager can increase
the equity exposure when market valuations are attractive and can prune down the equity exposure by increasing
exposure to other assets when equity markets get expensive or experience high volatility.

This completes our list of the 3 Best Multi Asset Allocation Funds for 2024. Investors can consider the SIP route to invest
in the category to minimise the impact of market volatility on the portfolio.

Note: This write up is for information purpose and does not constitute any kind of investment advice or a
recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of
future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about
your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market
risks, read all scheme related documents carefully. Registration granted by SEBI, Membership of BASL and
certification from NISM no way guarantee performance of the intermediary or provide any assurance of returns to
investors.

3 Best Multi Asset Allocation Funds for 2024 Page 8

Disclaimer:
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a
mutual fund recommendation or advice to make an investment decision.

Registration granted by SEBI, Membership of BASL and certification from NISM in no way guarantee performance of the
intermediary or provide any assurance of returns to investors.

© Quantum Information Services Pvt. Ltd. All rights reserved.

Any act of copying, reproducing or distributing this report whether wholly or in part, for any purpose without the permission of
PersonalFN is strictly prohibited and shall be deemed to be copyright infringement.

Legal Disclaimer: Quantum Information Services Pvt. Limited (PersonalFN) is an independent Mutual Fund research house, SEBI
Registered Investment Adviser (Reg. No: INA000000680) and Registered Mutual Fund Distributor (AMFI: ARN 1022). This document
does not constitute or is not intended to constitute an offer to buy or sell, or a solicitation to an offer to buy or sell financial
products, units or securities. All content and information is provided on an 'As Is' basis by PersonalFN. Information herein is believed
to be reliable but PersonalFN does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of
any kind, whether express or implied. PersonalFN does not assure or guarantee the user any minimum or fixed returns. PersonalFN
and its employees, personnel, directors will not be responsible for any direct / indirect loss or liability incurred by the user as a
consequence of him or any other person on his behalf taking any investment decisions based on the contents and information
provided herein. Use of the information provided herein is at the user's own risk. Information contained herein does not constitute
investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or
needs of individual subscribers. This is not directed for access or use by anyone in a country, especially, USA, Canada or the
European Union countries, where such use or access is unlawful or which may subject PersonalFN or its affiliates to any registration
or licensing requirement. PersonalFN may hold shares in the company/funds discussed herein. Any names or situations depicted if
any are purely fictional and serve the purpose of illustration only. Any resemblance between the illustrations and any persons living
or dead is purely coincidental. The user/reader shall not recompile, disassemble, copy, modify, distribute, transmit, display,
perform, reproduce, publish or create derivative works from, transfer, or sell any information obtained under this service. The
performance data quoted represents past performance and does not guarantee future results. Mutual Fund Investments are subject
to market risk, read all scheme related documents carefully. As a condition to accessing PersonalFN’s content and website, you
agree to our Terms and Conditions of Use, available here.

Quantum Information Services Private Limited

SEBI (Investment Advisers) Regulation, 2013. Reg.No. INA000000680

Address: 103 Regent Chambers, Jamnalal Bajaj Marg, Nariman Point, Mumbai 400021

Tel (Board): +91 22 6136 1200 | Email: info@personalfn.com | Web: www.personalfn.com

CIN: U65990MH1989PTC054667 | BASL Membership ID: 1488

Name of the Compliance and Grievance Officer: Ms. Swati Savla

Email: compliance@personalfn.com | Tel (Direct): +91 22 6136 1224

Follow us on:

3 Best Multi Asset Allocation Funds for 2024 Page 9