Mutual Fund Investment: Asset allocation helps you maximise your returns, beat heat of market inflation, say experts

Mutual Fund investors are unable to maximise their investment returns because they don't know the benefits of asset allocation, say investment experts.

Mutual Fund's asset allocation helps an investor to beat the rise of market inflation and his or her lifestyle inflation. Photo: Pixabay

Simplification of investment in the last few years has made mutual funds investment one of the most preferred options among the Indian millennials. However, mutual fund investors are still able to know the possible ways that can help them maximise their investment returns. Investment experts say that lack of knowledge about the asset allocation is one of the major reason for this. They say that mutual funds investor should first know the benefits of asset allocation then only they should try investing.

Speaking on the benefit of asset allocation, investment expert Prakash Ranjan Sinha said, "Asset allocation helps a Mutual Funds investor to beat the heat of market inflation and his or her lifestyle inflation." He said that there are some important factors that should be kept in mind while finalising the asset allocation of funds and those factors are: goal, time to achieve that goal and risk-taking ability.

"For asset allocation on needs to understand how much he or she can allocate funds to cash, debt and equities because if equities can give maximum return then it may incur losses as well. So, one should allocate funds to each segment so that one segment loss can be pared with other segment gains," said Sinha.

On returns that one can get in cash, debt and equity plans, Jitendra Solanki, a SEBI registered investment expert said, "Equity plans move maximum while debt funds move minimum. But, in debt funds, one can expect a fixed return that makes it attractive among the senior citizen age group of investors. Sinha elaborated that age also makes a difference in asset allocation as it decides how much you have already invested or how much time you have to invest and achieve your goals."

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