Which is better, a multi-cap or a multi-asset allocation mutual fund?

The choice depends on your risk tolerance. If you are comfortable with the high risk associated with pure equities, a multi-cap fund may be suitable for your portfolio. However, if you want more stability with exposure to debt or commodities, invest in a multi-asset allocation fund.

How many asset classes are required in a multi-asset allocation fund?

Usually, multi-asset allocation funds invest in at least three asset classes. As per regulatory guidelines, a minimum 10% of the underlying assets must be allocated to each of these categories.

Are multi-asset allocation funds suitable for beginners?

Yes, these funds can be suitable for beginners as they help them diversify their portfolio.

Do multi-asset allocation funds invest in gold?

Yes, many multi-asset allocation funds invest in gold. Instruments like gold ETFs help investors gain this exposure.

Are multi-asset allocation funds safer than equity funds?

Due to the exposure to debt and commodity segments, multi-asset allocation funds tend to be less volatile compared to purely equity funds. However, they still carry some level of risk as these funds are market-linked investments.