New Delhi. When a cricket batsman adopts a well-thought-out strategy, focusing on singles rather than risky boundary shots, the thrill of big shots in the game may be less, but the scoreboard shows a steady run-rate and there is no risk of losing wickets. Such players are often considered reliable, who deliver better results when the team needs them the most.

In the investment space, multi-asset funds follow this philosophy. Instead of looking for high risk, high reward opportunities, these funds aim to provide consistent balanced growth. They may not top the performance charts every year but prioritise capital protection while delivering stable returns over time.

Multi-asset funds: Benefits of diversified investing

Multi-asset funds invest in different categories such as stocks, bonds, gold, real estate, and global markets. This diversification helps reduce risk by balancing your investments during market fluctuations. For example, if the stock market falls, gold prices may rise, providing stability to the portfolio. Thus, this makes multi-asset funds an attractive option, especially for those who are new to investing.

Each asset class performs differently depending on the market environment. For example, equities performed the best in 2023 with a return of 19%, while gold and bonds ranked second and third with 15.4% and 7.3% returns, respectively. Compare this to 2022, where stocks returned only 4.4%, while gold was the biggest gainer with a return of 14%. Economic conditions and global events constantly impact the performance of different asset classes.

Multi-asset funds: A balance of risk and reward

The biggest advantage of multi-asset funds is that you can invest your money in different sectors. Studies show that decisions related to asset allocation determine almost 90% of the portfolio performance. Multi-asset funds optimize risk and reward by providing a balanced mix of equities, bonds and other assets.These funds simplify the investment process and provide a stable and effective way to build wealth by reducing the need for multiple investments.

If you want to invest in such a fund, you can consider ICICI Prudential Multi-Asset Fund. This reputed fund with a track record of 22 years has delivered an impressive CAGR of 21.20% and a one-year return of 22.68% since its inception (till November 29, 2024). Also, the three-year and five-year CAGR returns have been 19.73% and 20.61%, respectively