Multi-Asset Funds Emerge as Safe Haven Amid Market Volatility

The Indian stock market has been under pressure due to rising geopolitical uncertainty and macroeconomic headwinds. Equity benchmark Nifty is down nearly 11% year-to-date, while domestic spot gold prices are up 14%. To navigate this heightened market volatility, experts recommend investing in multi-asset allocation funds.

These funds require investing in at least three asset classes with a minimum of 10% allocated to each. Typically, this includes equity, debt, and precious metals like gold or silver. Multi-asset allocation funds have delivered excellent returns, making them an attractive option for investors. The Nippon Multi Asset Allocation Fund, for example, has given a return of about 19% CAGR over a 3-year period.

Experts highlight the benefits of multi-asset allocation funds in the current market environment. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, notes that fixed-income returns are rising, precious metals are stabilizing with an upward bias, and stocks have turned volatile. G Chokkalingam, founder and head of research at Equinomics Research, also emphasizes the importance of a multi-asset allocation strategy in navigating market uncertainty.

DD Sharma, MD of MF King, adds that amid stretches of high equity market valuations, macroeconomic uncertainty, and frequent short-term market corrections, multi-asset allocation funds offer stability and protection for investors' portfolios. As the Indian stock market continues to navigate challenging conditions, investing in multi-asset allocation funds may provide a more stable and secure option.