Launch: Morgan Stanley Multi Asset Fund

Financial planners advise investors to invest in multiple assets such as equity, fixed income and gold as part of their asset allocation. Different asset classes move in different directions over a period of time. Last year, equities lost 25% but gold gained 35%.

Since it is very difficult for individuals to predict these movements, financial planners recommend an asset allocation. Where proportion of these assets could vary based on factors such as your risk taking ability, your age and time horizon of your investments. Morgan Stanley Multi Asset Fund aims to fulfill these needs by investing in multiple assets. The new fund offer closes on January 31, 2012.

Product features

Morgan Stanley Multi Asset Fund, an open ended debt fund, will invest in debt, equity and gold. The fund has two plans, Plan A and Plan B, with each having separate portfolios. Plan A will invest in debt and equity, while Plan B will invest in debt, gold ETFs and equity. In the case of Plan A, debt shall constitute 80-100 % of the portfolio , while equity will be 0-20 %.

In Plan B, debt shall constitute 65-100 %, while equity and Gold ETFs will form the balance 0-35 % of the portfolio, with equity and gold not exceeding 20% of net assets. There is no entry load, while there is an exit load of 1% if you sell before the completion of one year. After one year, there is no exit load.

Performance of similar funds

Existing funds which invest in multiple assets are the likes of Canara Robeco Indigo fund, which gave a return of 15% over the last one year, Axis Triple Advantage (return 7.03%), Taurus MIP Advantage (8.15%) and Religare MIP Plus (7.78%).

“Goals of a person change over a period of time. Such readymade products may not help everyone meet their asset allocation. Hence invest in products that help you meet your goals,” says Mukul Seshadri , a Mumbai-based certified financial planner.

Why invest:

Multi asset funds offer a readymade asset allocation. Hence many could find it useful.

Why not to invest:

One-sizefits-all may not work in the world of investments.