As Diwali brings prosperity and joy, it’s also the perfect time to strengthen our finances and secure future wealth. While we worship Goddess Lakshmi for wealth and success, there’s a valuable lesson in the puja itself: just as each item on the thali has its role, so does each asset class in a well-rounded investment. Multi-asset funds offer a unique approach to investing by combining different types of investments—equity, debt, gold, and cash. These funds aim to bring both growth and safety to your portfolio, just as each element of a puja thali contributes to a complete ritual.
Why Choose Multi-Asset Funds This Festive Season?
Diwali is an auspicious time to start new ventures or refresh financial plans. Multi-asset funds are designed to meet diverse financial needs, making them an ideal choice for a balanced and growth-oriented investment strategy. Instead of relying solely on one type of asset, these funds combine several types—equities, bonds, gold, and cash—each playing a unique role in providing both stability and growth. As Suresh Soni, CEO of Baroda BNP Paribas AMC, explains, multi-asset funds are like a well-composed puja thali, offering a mix of benefits for a stable, long-term financial journey.
Equity: The Light That Drives Growth in Multi-Asset Funds
In the same way that a diya (lamp) illuminates and represents hope, equities in multi-asset funds bring the growth potential. Equities or stocks are a key component of these funds and aim to generate higher returns over the long term. Like the diya, which removes darkness and brings light, equities help build wealth by offering returns that often exceed other asset classes over time. However, equities also come with risks due to market fluctuations. With a multi-asset approach, these risks are cushioned by other assets, helping create a steady path towards financial goals. Including equity in your portfolio is like lighting a diya for growth, helping illuminate the journey to wealth creation.
Debt Instruments: Stability and Security in Your Portfolio
Debt investments in a multi-asset fund serve a purpose similar to the fragrant flowers in the puja thali, which symbolize purity and peace. Debt instruments, like bonds and government securities, are stable assets that provide regular income without significant risk. They balance out the potential volatility of equities, bringing stability to your portfolio. While equities may rise and fall, debt investments act as a consistent source of returns, helping to balance the entire fund. This stability is especially valuable for conservative investors or those nearing retirement who seek a balance between growth and security.
Debt assets play a crucial role in protecting your wealth from sudden market shifts, just as flowers add peace and beauty to the puja.
Gold: A Safe Haven and Protector for Your Portfolio
Gold, much like the tilak (roli) in a puja, serves as a shield, offering protection and value preservation. It is known as a safe-haven asset, providing stability during economic downturns or periods of high inflation. Gold’s value generally moves in the opposite direction of equity markets, which can help reduce risk when markets are turbulent.
Indians have long regarded gold as a symbol of wealth and security, and including it in a multi-asset fund brings similar benefits. As the global economy faces ups and downs, gold continues to protect wealth. Rising demand from growing economies like India and China adds to its enduring value, making it a solid choice for diversification within your investment portfolio.
Cash Equivalents: Liquidity and Flexibility in Times of Need
No puja thali is complete without coins or money, symbolizing wealth and abundance. Similarly, cash equivalents in a multi-asset fund ensure liquidity, allowing quick access to funds when needed. Cash equivalents include assets like treasury bills and short-term securities, offering flexibility without high risk. This cash portion of the fund acts as a cushion, providing stability and acting as a buffer against market volatility. Having cash equivalents in your fund ensures that you’re prepared for sudden expenses or market shifts, bringing peace of mind to your investment strategy.
Building a Balanced Portfolio with Multi-Asset Funds
Just as a puja thali requires various items to complete the ritual, a well-rounded portfolio needs a mix of assets to optimize growth while reducing risk. Multi-asset funds offer a convenient way to diversify, allowing investors to participate in equities, bonds, gold, and cash through a single fund. This balanced approach caters to different financial needs and investment goals, aiming to deliver consistent returns with reduced volatility. By investing in these funds, you can create a well-structured portfolio without the need to manage multiple individual investments.
This Diwali, bring balance and growth to your financial portfolio by investing in multi-asset funds. Just as the items in a puja thali work together to fulfill each ritual’s purpose, these diverse asset classes work together to bring you closer to your financial goals.
