Multi Asset Allocation

About

Multi Asset Allocation Funds (MAAFs) are hybrid mutual funds that invest in three or more distinct asset classes — typically equity, debt, and other assets like gold, silver, REITs or ETFs. The primary objective is to use diversification across asset types to manage risk and optimise returns in different market conditions. These funds often employ active allocation strategies where the fund manager can adjust exposures based on market views.

Fund Type

Hybrid

Key Features

Multi-Asset Diversification: Invests across equity, debt, and other assets (e.g., gold/silver ETFs), reducing dependency on any single asset class.

Active Allocation: Fund managers rebalance allocations dynamically based on market conditions to optimise risk-adjusted returns.

Tax Efficiency on Rebalancing: Portfolio rebalancing within the scheme does not trigger capital gains tax for investors — unlike if an individual did frequent rebalancing.

Access to Multiple Growth Drivers: Equity offers growth potential, debt offers income/stability, and commodities can hedge inflation/market cycles.

Taxation

STCG

If Equity Allocation is ≥ 65% Holding Period ≤ 12 months, 20% Tax on Gain. Otherwise as per Income Tax slap

LTCG

If Equity Allocation is ≥ 65% Holding Period > 12 months, 12.5% Tax on Gain. Otherwise as per Income Tax slap

Dividends Tax

As Per Income tax slab rates, TDS of 10% may be deducted by the fund house if dividend income exceeds ₹5,000 in a financial year.

Exemption Limit

If Equity Allocation is ≥ 65%. 1.25 Lakh on LTCG in financial year

Indexation

No Indexation

Allocation

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Equity, Debt, and Other assets

0% – 100%

There is no fixed static ratio mandated like in other fixed hybrid categories — allocation is often dynamic and based on market conditions or scheme mandate

Locked in Period

Nill

Exit Load

Some schemes might charge an exit load of 0 – 1% if units are redeemed within 1 year. However, the exact structure may vary based on the specific scheme.

Risk Associated

If Equity Allocation ≥ 65%

Find the funds

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully before investing. Past performance is not indicative of future performance.