Most of us do invest in different kind of available options like some of you like to invest in Mutual Funds, gold, Equities or in debt. Each has its own advantage and disadvantage over other, so you can select the appropriate option as per your needs, time and funds available to you.
Nowadays company has started giving a new type of investment scheme to its customers, Multi Assets Scheme, as its name indicates all, in this your money is invested in more than one fund, Fund manager invest your money in Equity, Gold and Debt, in this debt provide a balance to your portfolio and Gold and Equity will provide high returns to you.
If you are going to invest in Multi fund then you wont need to rebalance your portfolio as with the change in market condition, so if you don’t have much time or you are don’t wanna rebalance your portfolio regularly then you go with Multi Asset fund, as you are not rebalancing your fund then it means that you are saving your time which you might had put on rebalancing and rebalancing costs too.
But there are some down side too for these funds, as these funds are new so might not have proper history and data available with you so that you can estimate how much return you can get and what are the chances of failure too.
These funds are mostly treated as debt funds so you have to pay high tax on these funds, these are charged at 10 % without indexation and 20% after indexations for long term capital gain, In short term these gains are added to your income and taxed as per it, you might have to pay tax on Equity after one year but Gold and Debt are treated as debt fund which makes your tax incidence lower.
Should You Invest In Multi Asset Fund?
The end decision whether to invest in multi asset fund or not lies as per your needs and conditions, if you wanna invest in dynamic funds across three different assets, Gold, Equity and Debt then you can go with it.
In multi asset you are going to mix 2 risky funds, Gold and Equity with debt, its quite risk and if fund manager fails to predict and manage risk then there will be some problem for you.
These funds are performing quite well till now but as there is lack of history of these funds you cant predict what can happen in future and how your income might get affected.
If you wanna cut the rebalancing cost and don’t have much time for rebalancing your funds then you can go with it, but you should know that these funds are treated as debt which might increase your taxation.