Stay diversified with multi-asset funds, invest with 5-10 years in mind

But investors who want the flexibility to alter their asset allocation may avoid these 3-in-1 funds

Multi-asset allocation funds — which invest in three asset classes (equities, debt and gold) — have enjoyed a good run over the past year. The category is up 11 per cent on average, with the best-performing fund fetching a return of 16.79 per cent (see table).

This category — which generally offers rather sedate returns (the five-year average return stands at 7.07 per cent) — has done well this year because all three asset classes have contributed.

Gold is up 25.82 per cent. With interest rates declining over the past year — the benchmark 10-year government bond yield is down