Can a mutual fund change the asset allocation while deploying funds of investors?

Considering the market trends , any prudent fund managers can change the asset allocation i e. he can invest higher or lower percentage of fund in equity or debt instruments compared to what is disclosed in the offer document. It can be done on a short term basis on defensive considerations ie. to protect the  NAV. Hence the fund managers are allowed certain flexibility in altering the asset allocation considering the interest of the investors.In case the mutual fund wants to change the asset allocation on a permanent basis, they are required to inform the unit-holders and giving them option to exit the scheme at prevailing NAV without any load.

Source:Moneycontrol.com

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