Should you invest in Multi Asset funds?
"A single multi-asset fund gives you exposure to several asset classes such as equity, debt, gold and International equities. This saves you the inconvenience of investing in multiple funds investing in these assets," said Santosh Joseph, co-founder and CEO, Germinate Wealth Solutions LLP. “It's also more tax-efficient when the fund manager internally rebalances between different assets than you doing so through redemptions," he added.
When an investor switches between funds to adjust his asset allocation, he or she may have to pay capital gains tax on any accrued gains in them because a switch is treated as a redemption. Joseph also highlighted the lower risk in such funds compared with pure equity but added that they are more for first-time investors than experienced investors who want tactical bets in asset classes.