Dynamic Asset Allocation Funds versus Multi Asset Allocation Funds: What’s the Difference & Which One Should You Choose?

Many investors think Dynamic Asset Allocation Funds and Multi Asset Allocation Funds are the same thing, just because both allocate money across different types of investments.

But they are actually quite different. A Dynamic Asset Allocation Fund keeps changing how much money it puts into shares (equity) depending on whether the market looks expensive or cheap. So when the market is high, it may reduce its share (equity) investments, and when the market is low, it may increase them. A Multi Asset Allocation Fund works differently.

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It keeps a fixed mix of shares, bonds, gold, REITs and other assets, and does not change this mix much even if the market goes up or down. Knowing this simple difference can help you pick the fund that truly matches how much risk you are comfortable with, and what you are trying to achieve with your money. In this article, let’s understand: What is a Dynamic Asset Allocation Fund?