Asset allocation funds are great for beginners in mutual fund investments as they invest in both equity and debt

Asset allocation funds are good for those investors who are shifting their investments from fixed deposits
Asset Allocation Funds, Mutual Fund, Fixed Deposits, Mutual Funds for beginners, Business News in Hindi.
New Delhi, Business Desk. If you are investing in mutual funds for the first time and are a retail investor, it would be better for you to invest in equity schemes of asset allocation. In fact, financial planners give this advice because retail investors cannot adhere to asset allocation discipline, and funds have proven to be good as a core portfolio for them.
The figures of profitability indicate that ICICI Prudential Asset Allocator Fund of Funds had invested 46.1 percent in equities by the end of October. It was divided into two schemes, with 19.9 percent in ICICI Prudential Large and Mid Cap Fund, and 27.1 percent in Bluechip Fund. The rest was also distributed in various schemes, including 13.5 percent in ICICI Pru All Season Bond Fund, 19.1 percent in Floating Interest Fund, 9 percent in Corporate Bond Fund, 9.7 percent in Money Market Fund, and 0.8 percent in Savings Fund.
Similarly, Franklin India Dynamic Asset Allocation Fund of Funds had a portion of equity in Franklin India Equity Fund and a portion of debt in Short Term Income Plan.
The AUM of ICICI Prudential Asset Allocator Fund was 4,372 crore rupees by November 19, with a return of 9.89 percent in one year and 11.09 percent in three years. The AUM of Franklin India Dynamic Asset Allocation Fund of Funds was 1,021 crore rupees, with returns of 7.11 percent and 8.6 percent in the above period.
ICICI Prudential's Chief Investment Officer (CIO) S. Naren says that people who want to get good returns on investment rotate their investments according to market cycles in various asset classes. Because when the economy is growing, the performance of the equity market is strong, and when the economy is in a contraction phase, the debt market performs well. In such situations, smart investors keep rotating their investments and continue to get good returns.
According to Naren, rotating investments in different asset classes results in better investment outcomes. If retail investors also want to invest in this way, then asset allocation schemes are a good option for them.
Products with low risk are good for first-time investors entering equities from fixed deposits. For such investors, asset allocation schemes can prove to be a core portfolio.
Rupesh Bhansali of GIP Capital says that investors do not have 100 percent confidence in which asset class to buy and which not to buy. Such investors should invest in asset allocation funds.