Multi-Asset Funds Good for Long Term

—Name withheld on request

When you are investing in a fund using a relatively low monthly systematic investment plan amount, it is important that you choose a fund that gives ‘broad’ exposure. Now, the word ‘comprehensive’ can mean two things, and your fund choice will depend on which meaning you choose. One, you can look for expansion in terms of asset classes – that is, look for a fund that invests in both the equity market as well as the debt market (and/or gold). In that case, you would choose a hybrid fund or a multi-asset fund. If you are looking for a medium risk profile for your long term investments then funds like DSP Equity and Bond funds will fit the bill.

On the other hand, if you choose to be aggressive, you want to get coverage in terms of the breadth of equity markets – both domestic and overseas. That is, you want a fund that invests independently in both the Indian stock market and the foreign stock market. If you are going this route, a fund like Parag Parikh Flexi-Cap Fund would be a good option.

Shrikant Meenakshi is the founder of Primeinvestor.in.