Asset allocation funds are mutual funds or exchange-traded funds (ETFs) that provide investors with a variable or fixed mix of assets. Typically, these assets are equities and fixed-income securities, as well as cash and cash equivalents. Some asset allocation funds seek to maintain a predetermined proportion of asset classes over time, while others analyze economic and market data to tactically vary the proportions on a regular basis. Following is a list of the three largest asset allocation-based ETFs, based on assets under management (AUM), available to investors as of March 2016.

First Trust Multi-Asset Diversified Income Index Fund

The largest asset allocation fund on the market is the First Trust Multi-Asset Diversified Income Index Fund (NYSEARCE: MDIV), with $761.81 million in AUM. The fund's investment objective is to mimic the performance of an index called the NASDAQ Multi-Asset Diversified Income Index. The index is a modified market capitalization-weighted index designed to provide exposure to multiple asset segments. The index comprises the following: 20% equities, 20% preferred securities, 20% real estate investment trusts (REITs), 20% master limited partnerships (MLPs) and 20% high-yield corporate debt.

Under normal circumstances, MDIV invests at least 90% of its assets in securities that match the composition of the index. The portfolio consists of 126 securities, with a median market capitalization of $5.35 billion. However, its range of market capitalization is $660 million to $211 billion. As of March 2016, the fund is tactically overweight MLPs and dividend-paying equities compared to the index, while being underweight REITs, high-yield debt and preferred securities. The fund's standard deviation is 8.82%, and its beta versus the S&P 500 is 0.62. The fund's expense ratio is 0.68%, and the trailing 12-month yield is 7.42%. MDIV's 52-week range is $13.00 to $21.40.

iShares Core Growth Allocation ETF

The second-largest asset allocation fund is the iShares Core Growth Allocation ETF (NYSEARCA: AOR) with $688.49 million in AUM. The fund seeks to track the investment results of an index composed of a portfolio of underlying equity and fixed-income funds intended to represent a growth allocation target risk strategy. The fund offers a simple way to build a diversified core portfolio with bonds and global stocks.

The portfolio is 60.84% equities, 38.75% fixed income and 0.41% cash. The fund's assets are spread over a dozen countries, including developed and emerging markets, with approximately 60% of the assets being invested in the United States. AOR only has 10 holdings, each being another ETF. The top five holdings comprise 78.76% of the portfolio and are focused on the following assets classes: U.S. core equity, U.S. total bond market, European core equity, Pacific core equity and U.S. treasuries. The fund's standard deviation is 7.14%, and its beta versus the S&P 500 is 0.58. Its expense ratio is 0.27%, and the trailing 12-month yield is 2.19%. AOR's 52-week range is $26.70 to $42.54.

PowerShares CEF Income Composite Portfolio

The third-largest asset allocation fund is the PowerShares CEF Income Composite Portfolio (NYSEARCA: PCEF) with $605.44 million in AUM. PCEF is based on the S-Network Composite Closed-End Fund Index. Under normal circumstances, the fund invests at least 90% of its total assets in securities of funds included in the index. As of March 2016, the index invests in investment-grade fixed-income securities and high-yield fixed-income securities, while others utilize an equity option-writing strategy.

The portfolio invests in 145 different securities, and the allocation is as follows: 40.83% investment-grade bond, 30.00% high-yield bonds and 29.17% option-writing strategies. The fund's expense ratio is 1.94%, and the 30-day SEC yield is 8.33%. PCEF's 52-week range is $16.15 to $24.20.