Groww Launches Multi Asset Allocation Fund: Should You Invest?

New Delhi, Sept 11, 2025 – Fintech platform Groww Mutual Fund has introduced its latest offering, the Groww Multi Asset Allocation Fund, an open-ended scheme designed to diversify investments across multiple asset classes. Investors can participate in the New Fund Offer (NFO) until September 24, 2025.

The fund will primarily allocate over 65% of its portfolio to equities, allowing it to qualify for equity taxation benefits. The remaining portion will be invested in debt and commodities such as gold and silver.

Why More Than 65% in Equities?

The structure is intentional. By keeping equity exposure above 65%, the scheme will be taxed as an equity mutual fund. Under current rules, long-term capital gains (LTCG) up to ₹1.25 lakh per year are tax-exempt. This makes the scheme more attractive from a post-tax return perspective compared to debt-heavy funds.

Asset Mix and Investment Strategy

Apart from equities, the Groww Multi Asset Allocation Fund will invest around 30–35% in debt instruments and commodities to balance risk. The fund will use its proprietary model called SHAASTRA (Strategic Holistic Asset Allocation and Systematic Technical Risk Assessment) for managing asset allocation.

The scheme will be managed by a team of three experienced fund managers – Paras Matalia, Kaustubh Sule, and Wilfred Goncalves.

• Minimum investment: ₹500 (lump sum)

• Minimum SIP investment: ₹100

• Exit load: 1% if redeemed within 30 days; no exit load after that

Benchmark Index

The benchmark for this scheme is a blended index that reflects its diversified strategy:

• Nifty 500 TRI – 60%

• CRISIL Composite Bond Fund Index – 30%

• Gold (INR) – 5%

• Silver (INR) – 5%

This diversified benchmark ensures the fund’s performance is measured against multiple asset classes rather than just equities.

Why Multi Asset Allocation Funds Are Gaining Popularity

Multi asset allocation funds have seen increasing investor interest in recent years. Their biggest strength lies in dynamic allocation—adjusting exposure to equities, debt, and commodities depending on market conditions.

This helps reduce volatility and limits the impact of sharp declines in any single asset class. For instance, if equities fall, the presence of gold, silver, or debt can provide stability.

According to AMFI data, the category has delivered an average return of 8.12% over one year and 16.46% CAGR over three years.

Should You Invest?

While past performance of the category looks encouraging, experts caution against relying solely on historical returns. The right decision depends on your risk appetite, investment horizon, and overall portfolio strategy.

The Groww Multi Asset Allocation Fund may be suitable for:

• Investors seeking diversification across multiple assets in a single portfolio.

• Those looking to benefit from equity taxation rules with some downside protection.

• First-time mutual fund investors who want exposure to more than just equities.

However, experts advise consulting a certified financial advisor before investing, especially if you are risk-averse or new to mutual funds.

Key Takeaways

• NFO open until Sept 24, 2025

• Equity allocation above 65% for tax efficiency

• Exposure to debt, gold, and silver for balance

• Blended benchmark index to track performance

• Minimum investment starts at just ₹500

💡 Disclaimer: The views expressed by market experts are their own. IEN and Groww do not provide investment advice. Investors should consult qualified professionals before making financial decisions.