Rs. 100- Rs. 10 crore
Start investing with Rs. 100 | Easy KYC | Expert-managed funds
How to Invest in SIP A Beginner's Guide
In summary
Multi-asset allocation funds combine different asset classes within one mutual fund scheme. Under Securities and Exchange Board of India (SEBI) rules, they must invest in at least three asset classes and maintain at least 10% in each. Key points include:
- At least three asset classes required.
- Each needs minimum 10% allocation.
- Different assets spread investment-related risks.
- Returns remain market-linked and can fluctuate.
- Risk depends on actual portfolio mix.
- Tax treatment varies by scheme structure.
- Compare costs, Riskometer, and allocation strategy.
You can explore 4,000+ mutual fund schemes on the Bajaj Broking website. Eligible SIP investments start from Rs. 100 per month, although individual scheme minimums can differ.
What are multi-asset allocation funds?
A multi-asset allocation fund is a hybrid mutual fund that invests across at least three asset classes.
SEBI's Master Circular for Mutual Funds dated 20 March 2026 states that a Multi Asset Allocation Fund must invest in at least three asset classes, with a minimum allocation of at least 10% in each.
Depending on the scheme, these asset classes can include equity, debt, gold, or other permitted investments mentioned in the Scheme Information Document.
Why do multi-asset allocation funds matter?
Multi-asset allocation funds let you invest across different asset classes through one scheme instead of managing several separate investments.
Equity, debt, gold, and other assets do not always move in the same direction at the same time. Combining them can reduce dependence on the performance of one asset class.
This does not mean the fund will avoid losses. A multi-asset fund can still fall when financial markets decline.
The important point is diversification. The scheme spreads your money across assets with different risk and return characteristics. This can make it useful for investors who want one professionally managed portfolio rather than choosing and rebalancing several asset classes themselves.
How do multi-asset allocation funds work?
Multi-asset allocation funds divide their portfolio among different assets according to the scheme's stated investment strategy.
For example, equity may provide long-term growth potential, while debt may play a different role in the portfolio. Gold can provide another source of return that may behave differently from equities.
The fund manager decides how much to allocate to each permitted asset within the scheme's stated limits. Professional fund managers also monitor and rebalance the portfolio according to the scheme mandate.
Some funds change their allocations more actively as valuations or market conditions change. Others operate within defined allocation ranges. You should therefore check the individual scheme rather than assuming every multi-asset fund follows the same strategy.
What are the main benefits?
The main benefit is diversification across several asset classes within one investment.
You may get the following advantages:
- Diversification: Investing across different assets can reduce dependence on a single market. Learn how to diversify your portfolio.
- Professional allocation: The fund manager decides how the portfolio should be divided within the scheme mandate.
- Portfolio rebalancing: Allocations can be adjusted when the scheme's strategy or market movements require it.
- Single-scheme exposure: You do not need to purchase separate equity, debt, and commodity funds simply to obtain multi-asset exposure.
- Different return drivers: Different assets can respond differently to inflation, interest rates, economic growth, and market sentiment.
Diversification can reduce concentration risk, but it cannot guarantee returns or prevent losses.
What risks should you understand?
Multi-asset allocation funds remain market-linked investments and can lose value.
The key risks include:
- Equity risk: Share prices can move sharply. A fund with high equity exposure can show significant volatility. Check its risk profile and SEBI-mandated Riskometer before investing.
- Interest-rate and credit risk: Debt holdings carry risks linked to rates and issuers.
- Commodity risk: Gold, silver, and other commodity-linked investments can fluctuate.
- Allocation risk: Fund-manager allocation decisions may not always work as expected.
- Concentration risk: Some schemes may hold a large proportion in one asset class even while meeting the 10% minimum in others.
Who may consider a multi-asset fund?
Multi-asset allocation funds may suit investors who want several asset classes within one professionally managed scheme.
Consider an illustrative example. Riya is 32 and is investing for an eight-year financial goal. Most of her existing investments are in equities, and she wants exposure to debt and gold without separately managing three funds. A multi-asset fund could give her a combined portfolio through one scheme.
However, suppose she already owns significant debt and gold investments. Adding another multi-asset fund could duplicate those exposures. She should first review her overall asset allocation and risk tolerance. This shows why suitability depends on your full portfolio, not simply the fund category.
How do these funds compare with single-asset funds?
The main difference is the number of asset classes managed within one scheme.
The following comparison shows the broad trade-off:
| Fund approach | Main exposure | Main consideration |
| Equity-focused fund | Primarily equities | Greater dependence on equity markets |
| Debt-focused fund | Primarily debt | Interest-rate and credit risks matter |
| Multi-asset allocation fund | At least three asset classes | Wider diversification but more complex allocation |
A multi-asset fund can reduce the need to rebalance separate funds yourself. In return, you give the fund manager more control over how your money is divided.
This distinction matters if you prefer to set your own equity, debt, and gold allocation.
What should you compare before investing?
Compare the fund's actual portfolio rather than choosing only from past returns.
Check these factors:
- Asset allocation: See how much goes into equity, debt, commodities, and other assets.
- Riskometer: Compare the scheme's current risk classification.
- Expense ratio: Costs reduce the returns available to investors.
- Investment strategy: Understand how and when allocations can change.
- Past performance: Review different market periods without assuming returns will repeat.
- Exit load: Check whether early redemption attracts a charge.
- Portfolio overlap: Check whether you already own the same types of assets elsewhere.
Also compare how the scheme has behaved during different periods of market volatility.
Conclusion
Multi-asset allocation funds combine at least three asset classes within one mutual fund scheme, with a minimum 10% allocation to each under SEBI rules. Their main advantage is diversification, but diversification does not make them risk-free.
Before investing, check how the scheme divides money across equity, debt, commodities, and other assets. Compare the Riskometer, expense ratio, investment strategy, taxation, and your existing portfolio.
The right choice depends on your goal, investment period, and ability to handle market movements. You can start by investing in mutual funds on the Bajaj Broking website after reviewing the relevant scheme documents.
Last reviewed: October, 2026
Mutual funds are subject to market risk. Please read the scheme-related documents carefully before investing.
Explore Investment Tools
Articles and Insights
Frequently Asked Questions
Understanding multi-asset funds
Safety and suitability
What are multi-asset allocation funds?
Multi-asset allocation funds are hybrid mutual funds that invest in at least three asset classes. SEBI requires a minimum allocation of 10% to each of those three asset classes. The exact portfolio differs across schemes and can include assets such as equity, debt, gold, or other permitted investments. Diversification reduces dependence on one asset class but does not remove market risk.
Which is the best multi asset allocation fund in India?
There is no single multi-asset allocation fund that suits every investor. You should compare the scheme's asset allocation, Riskometer, expense ratio, investment approach, portfolio, and performance across different periods. Also check whether the fund adds useful diversification to investments you already hold. A scheme that suits one investor's risk tolerance may not suit another investor's goals.
Is multi asset allocation fund safe?
A multi-asset allocation fund is not risk-free. It invests across several asset classes, which can reduce reliance on one market segment, but equity, debt, and commodity holdings can all lose value. The level of risk also changes according to the fund's portfolio. Check the latest Riskometer and asset allocation before deciding whether the scheme matches your risk tolerance.
Is it good to invest in a multi-asset fund?
A multi-asset fund can be considered when you want exposure to several asset classes through one scheme and do not want to manage each allocation separately. However, you should first check your existing portfolio, financial goal, investment horizon, costs, and risk tolerance. Past performance alone should not determine whether a particular multi-asset fund is suitable for you.
How does a multi-asset allocation fund rebalance its portfolio across asset classes?
A multi-asset allocation fund periodically adjusts its investments across asset classes such as equity, debt, gold, and other securities based on its investment strategy and market conditions. Rebalancing helps maintain the intended asset allocation when market movements cause the portfolio's allocation to change.
Can multi-asset allocation funds reduce the impact of a fall in equity markets?
Multi-asset allocation funds can potentially reduce the impact of a fall in equity markets by spreading investments across different asset classes. If equity prices decline, gains or stability from debt, gold, or other assets may help offset part of the loss. However, diversification does not eliminate market risk or guarantee returns.
Disclaimer
Bajaj Finance Limited ("BFL") is registered with the Association of Mutual Funds in India ("AMFI") as a distributor of third party Mutual Funds (shortly referred as 'Mutual Funds) with ARN No. 90319
BFL does NOT:
(i) provide investment advisory services in any manner or form.
(ii) carry customized/personalized suitability assessment.
(iii) carry independent research or analysis, including on any Mutual Fund schemes or other investments; and provide any guarantee of return on investment.
In addition to displaying the Mutual fund products of Asset Management Companies, some general information is sourced from third parties, is also displayed on As-is basis, which should NOT be construed as any solicitation or attempt to effect transactions in securities or the rendering any investment advice. Mutual Funds are subject to market risks, including loss of principal amount and Investor should read all Scheme/Offer related documents carefully. The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities forming part of the Mutual Fund. The NAV will inter-alia be exposed to Price/Interest Rate Risk and Credit Risk. Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the Mutual Fund. BFL shall not be responsible or liable for any loss or shortfall incurred by the investors. There may be other/better alternatives to the investment avenues displayed by BFL. Hence, the final investment decision shall at all times exclusively remain with the investor alone and BFL shall not be liable or responsible for any consequences thereof.
Investment by a person residing outside the territorial jurisdiction of India is not acceptable nor permitted.
Disclaimer on Risk-O-Meter:
Investors are advised before investing to evaluate a scheme not only on the basis of the Product labeling (including the Riskometer) but also on other quantitative and qualitative factors such as performance, portfolio, fund managers, asset manager, etc, and shall also consult their Professional advisors, if they are unsure about the suitability of the scheme before investing.
Disclosure: Bajaj Finance Limited (BFL) is a distributor of Mutual Funds with ARN - 90319 and distributes mutual funds of Bajaj Finserv Asset Management Limited (BFSAMC). BFL receives commission towards distribution of mutual fund products. BFSAMC is a group company of BFL, carrying business on arm’s length basis without any conflict of interest and in accordance with the prevailing law / regulation.
Disclaimer
Bajaj Finance Limited ("BFL") is an NBFC offering loans, deposits and third-party wealth management products.
The information BFL contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed.
This information should not be relied upon as the sole basis for any investment decisions. Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.
Disclaimer
Mutual Fund SIP calculator may provide potential investors an approximate estimate on the maturity amount of the monthly SIP, purely based on mathematical calculation of the projected annual return rate selected by investor. However, such calculation does not factor the actual performance by the Asset Management Company (AMC) and should not be treated as any advice or assurance about the actual return of investment. Mutual Funds do not have a fixed rate of return and it is not possible to predict the rate of return. Please note that the SIP calculator are for illustrations only and do not represent actual returns which may vary depending on various factors including but not limited to actual performance, expense ratio, taxation, exit load (if any), etc.