Wondering how to diversify

Equities are generally perceived to be riskier than other asset classes, even though they have often performed better than other asset classes over the long term.

Equity as an asset class tends to have an uneven pattern of returns, and volatile times can be particularly alarming for investors. As a result, investors, especially those who are conservative, prefer products in the fixed income space.

The recent performance of equities in India could have made you feel that way too. And so, here are some products you may find helpful.

The Kotak Balanced Advantage Fund and Kotak Multi Asset Allocator Fund of Fund – Dynamic are some of the funds you can consider investing in.

A Balanced Advantage Fund, under the category of hybrid funds, typically shuffles between debt and equity, changing allocation among the two asset classes based on market conditions.

You could say, that with a balanced advantage fund, an investor does not need to worry about diversification, as it is done within the fund itself. Investors need not worry about timing the market either, as the fund automatically takes care of that.

Ups and downs in the market are also taken care of, as balanced advantage funds typically buy at lower levels, and sell at higher levels.

Below is how the Kotak Balanced Advantage Fund had allocated its assets as of June 30, 2022: 

 

                                                                                                                                                                                                          

The Kotak Multi Asset Allocator Fund of Fund - Dynamic, meanwhile, is a fund of fund, which invests in other schemes of Kotak Mahindra Mutual Fund.

Some of these schemes include Kotak Emerging Equity Fund, Kotak Bond Fund, Kotak Bluechip Fund, Kotak Gold ETF, Kotak Savings Fund, Kotak Infrastructure & Economic Reform Fund, Ishares Nasdaq 100 UCITS ETF and Kotak Small Cap Fund.

The fund has given over 15% CAGR since its inception*, and has generated an alpha over its Tier – 1 benchmark over a seven-year, five-year, three-year and one-year period as of June 30, 2022**.

Equities putting you off? Try these now.

 

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*Data is for Kotak Multi Asset Allocator Fund of Fund – Dynamic – Regular Plan (Growth Option). Past performance may or may not be sustained in future. Please refer above for detailed performance-related disclosures.

^Source: Factsheet. Please click here​ for the detailed portfolio. The sector(s)/stock(s)/industry mentioned above does not constitute any recommendation of the same and is for information purposes only. We may or may not have any future positions in the sector(s)/stock(s).

**Source: Factsheet. Please click here​ for the detailed portfolio. The same is for information only and shall not be construed as any recommendation.

Kotak Multi Asset Allocator Fund of Fund - Dynamic is managed by Mr. Abhishek Bisen and Mr. Devendra Singhal. ​View the funds managed by them.