Why Multi-Asset Funds Are The New Investor Favourite

Multi-asset allocation funds are witnessing unprecedented investor interest, with net inflows surging to ₹5,344 crore in October 2025 as investors seek diversification amid market volatility.

What Are Multi-Asset Allocation Funds?

Multi-asset funds provide diversified exposure across three core asset classes – equity, debt, and commodities like gold and silver – within a single investment vehicle. According to SEBI regulations, these funds must allocate at least 10% to each of the three asset classes.

The exceptional performance of gold and silver, delivering over 50% returns in 2025, has transformed investor perception, establishing commodities as essential portfolio components alongside traditional equities.

Expert Opinion: Should You Invest?

Navy Vijay Ramavat, Managing Director of Indira Securities, explains: “In the past year, equities have struggled while commodities like gold and silver delivered exceptional returns, with debt providing steady income. This makes multi-asset funds a strategic choice for investors seeking stable, consistent returns with reduced risk through built-in diversification.”

Kotak Mutual Fund managers Devender Singhal and Abhishek Bisen concur, stating investors benefit from multi-asset funds during the current market slowdown and gold price rally.

Why Invest in Multi-Asset Funds Now?

Risk Management in Volatile Times

Indian equity markets declined in August 2025 due to 50% US trade tariffs on Indian exports and disappointing Q1 results, despite positive developments including India’s sovereign rating upgrade, GST rationalization talks, and expected US Fed rate cuts.

“Multi-asset funds effectively manage risk through diversified exposure across asset classes, particularly valuable during current geopolitical tensions, inflation concerns, and market volatility,” Singhal added.

Gold as Strategic Hedge

Gold allocation serves as effective protection against market downturns and inflation, with prices maintaining strong momentum throughout calendar year 2025.

Dynamic Allocation Flexibility

These funds allow managers to dynamically adjust asset class exposure based on changing market conditions, optimizing portfolio performance.

Top Multi-Asset Fund Options

Here are five prominent multi-asset allocation funds with their performance metrics:

• Nippon India Multi Asset Fund: NAV ~₹25, AUM ₹8,700 crore, Very High Risk, 17% 1-year return, 20-21% 3-year return
• ICICI Prudential Multi Asset Fund: NAV ~₹600, AUM ₹72,000 crore, High Risk, 16-17% 1-year return, 18-19% 3-year return
• Tata Multi Asset Allocation Fund: NAV ~₹18, AUM ₹4,500 crore, Very High Risk, 15% 1-year return, 16-18% 3-year return
• SBI Multi Asset Allocation Fund: NAV ~₹34, AUM ₹11,300 crore, Very High Risk, 15-17% 1-year return, 15-16% 3-year return
• DSP Multi Asset Allocation Fund: NAV ~₹22, AUM ₹5,000 crore, High Risk, 11-13% 1-year return, 19-20% 3-year return

Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.