The monthly inflows in multi asset allocation mutual funds has surged by nearly 41% to Rs 4,982 crore in September. According to market experts, the sharp rise in inflows of multi-asset funds was largely driven by heightened market volatility and investors caution towards equities amid geopolitical uncertainties.
“The recent consolidation in equities, performance of gold, and stable returns from debt instruments encouraged investors into multi-asset funds. However, while multi-asset funds provide diversified exposure across asset classes, but they limit the investor’s flexibility to actively manage or rebalance allocations in line with individual goals, time horizons, and risk appetite,” Arjun Guha Thakurta, Executive Director, Anand Rathi Wealth Limited told ETMutualFunds.
Another expert mentions that with gold and silver making records and resilience in debt funds, investors are moving to other asset classes leading to popularity of multi asset allocation funds.
“Indian equity markets have been quite volatile, affected by disappointing corporate earnings, higher valuations, global events, adverse tariff outcomes and a weakening currency over the past year. With gold and silver making record highs and resilience in debt funds, investors have been shifting to other asset classes, leading to the popularity of the multi-asset funds. These funds can soften the blow from equity swings, offering steadier returns in turbulent times,” Shruti Jain, Chief Strategy Officer, Arihant Capital Markets shared with ETMutualFunds.
According to the monthly data by Association of Mutual Funds in India (AMFI), the category received an inflow of Rs 3,527 crore in August. In the current calendar year, multi asset allocation funds have witnessed a drop in inflows in the first three months and then saw a surge between April to July.
In 2025 so far, multi asset allocation funds have received a total inflow of Rs 28,971 crore whereas in the current financial year, these funds received a total inflow of Rs 17,967 crore.
The monthly note by AMFI says that multi-asset funds saw the highest inflow, amounting to Rs 4,982 crore, and the strongest asset growth at 6.3% on-month, totalling Rs 1.40 lakh crore.
“These funds, which provide exposure across equities, fixed income, derivatives and commodities such as gold, are increasingly preferred for their ability to balance risk across asset classes and hedge against market volatility. Their dynamic allocation strategy allows investors to capture the upside potential, while moderating downside risk, making them attractive for those seeking diversified returns with relatively lower portfolio volatility,” the monthly note said.
Post seeing the inflow trend in multi asset allocation funds, Thakurta of Anand Rathi Wealth does not recommend investment in multi asset allocation funds and believes that the recent inflows are due to temporary investor caution towards equity markets driven by geopolitical uncertainties, and adds that this interest may be temporary.
“Investing in multi-asset/hybrid funds based on recent inflows is not recommended, and additionally, investing in this category could limit the investor's control over the asset allocation, as the asset allocation is the fund manager’s discretion, which may not align with the investor's risk appetite & their investment goals,” Thakurta added.
On the contrary, Jain believes that the record inflows and healthy returns have highlighted how multi-asset allocation funds thrive in times of uncertainty and for long-term or risk-conscious investors, entering now can offer balanced exposure, built-in diversification, and internal rebalancing without the stress of timing individual asset class moves.
“Diversification across asset classes has always been the key to successful investing. No one can consistently predict market cycles or which asset class will shine during which time. As a smart investor, timing in the market is more important than time in the market. Waiting for the “perfect” market conditions to invest often causes missed opportunities. Hence, you can consider these funds as an integral part of your portfolio for diversification and smart investing,” Jain added.
What are multi-asset allocation funds?
Multi-asset allocation funds are hybrid funds that need to invest a minimum of 10% in at least 3 asset classes. These funds typically have a combination of equity, debt, and gold. Some schemes also add international equities, InvITs and REITs.
The equity allocation in the case of multi-asset funds could vary between 0-70%. Aggressive multi-asset funds could typically have 50-65% equity while the conservative ones could have between 35-50%. In the case of multi-asset funds, some schemes that allocate more than 65% to equity enjoy equity taxation.
But with gold and silver rallying and offering good returns, many investors are willing to invest separately in equity, debt, and gold funds against multi-asset allocation funds.
Thakurta says that investors can categorize the ideal asset allocation across the assets based on their investment goals and having a custom-made asset allocation will give you clean control over your asset allocation & have the flexibility to rebalance it according to your risk profile.
He advices maintaining individual allocations across the assets instead of locking into a single multi-asset fund ensures better liquidity and investors can redeem or rebalance specific portions of their portfolio as per market conditions or cash flow needs, rather than being tied to the fund manager’s allocation decisions.
On the other hand, Jain says that a well-constructed mutual fund portfolio should allocate 20–35% to multi asset allocation funds, letting these vehicles anchor overall risk while participating in growth cycles and these funds will provide a cushion against equity downturns, all while remaining flexible enough to adjust as goals, market outlook, or risk tolerance evolve.
In September, multi asset allocation funds gave an average return of 2.05% with the highest being 5.08% delivered by DSP Multi Asset Allocation Fund.
Gold ETFs gave an average return of 10.12% with Invesco India Gold ETF delivering the highest return of 10.40% in September whereas silver ETFs gave an average return of 14.99% with SBI Silver ETF FOF offering the highest return of around 15.91% in the said time period.
While considering current market valuations and earnings momentum, Thakurta is of the opinion that equities are expected to deliver returns in the range of 12–14% over the coming years, debt instruments are likely to provide stable but moderate returns of around 6–7%, while gold, which has outperformed in recent years amid global uncertainties and sustained central bank buying, is expected to generate 8–10% returns, potentially outperforming debt in the near term.
“The ideal approach for investors is to maintain a balanced portfolio that combines growth-oriented assets with defensive ones ensuring long-term growth, portfolio stability, and liquidity even amid changing market cycles,” said the expert from Anand Rathi Wealth.
Jain adds that Gold and silver have been making record highs due to ongoing geopolitical tensions and persistent inflation. Will this rally continue or its peaking out? No one really can predict. Most experts could not anticipate this rally either. Debt may also benefit as central banks remain cautious.
“Having said that, among multi-asset funds, those with globally diversified equity, robust debt management, and meaningful exposure to precious metals will be good picks for investors who want steady outperformance, especially if market volatility continues,” she added.
One should always invest based on their risk appetite, investment horizon, and goals.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in along with your age, risk profile, and Twitter handle.
“The recent consolidation in equities, performance of gold, and stable returns from debt instruments encouraged investors into multi-asset funds. However, while multi-asset funds provide diversified exposure across asset classes, but they limit the investor’s flexibility to actively manage or rebalance allocations in line with individual goals, time horizons, and risk appetite,” Arjun Guha Thakurta, Executive Director, Anand Rathi Wealth Limited told ETMutualFunds.
Another expert mentions that with gold and silver making records and resilience in debt funds, investors are moving to other asset classes leading to popularity of multi asset allocation funds.
“Indian equity markets have been quite volatile, affected by disappointing corporate earnings, higher valuations, global events, adverse tariff outcomes and a weakening currency over the past year. With gold and silver making record highs and resilience in debt funds, investors have been shifting to other asset classes, leading to the popularity of the multi-asset funds. These funds can soften the blow from equity swings, offering steadier returns in turbulent times,” Shruti Jain, Chief Strategy Officer, Arihant Capital Markets shared with ETMutualFunds.
According to the monthly data by Association of Mutual Funds in India (AMFI), the category received an inflow of Rs 3,527 crore in August. In the current calendar year, multi asset allocation funds have witnessed a drop in inflows in the first three months and then saw a surge between April to July.
In 2025 so far, multi asset allocation funds have received a total inflow of Rs 28,971 crore whereas in the current financial year, these funds received a total inflow of Rs 17,967 crore.
The monthly note by AMFI says that multi-asset funds saw the highest inflow, amounting to Rs 4,982 crore, and the strongest asset growth at 6.3% on-month, totalling Rs 1.40 lakh crore.
“These funds, which provide exposure across equities, fixed income, derivatives and commodities such as gold, are increasingly preferred for their ability to balance risk across asset classes and hedge against market volatility. Their dynamic allocation strategy allows investors to capture the upside potential, while moderating downside risk, making them attractive for those seeking diversified returns with relatively lower portfolio volatility,” the monthly note said.
Post seeing the inflow trend in multi asset allocation funds, Thakurta of Anand Rathi Wealth does not recommend investment in multi asset allocation funds and believes that the recent inflows are due to temporary investor caution towards equity markets driven by geopolitical uncertainties, and adds that this interest may be temporary.
“Investing in multi-asset/hybrid funds based on recent inflows is not recommended, and additionally, investing in this category could limit the investor's control over the asset allocation, as the asset allocation is the fund manager’s discretion, which may not align with the investor's risk appetite & their investment goals,” Thakurta added.
On the contrary, Jain believes that the record inflows and healthy returns have highlighted how multi-asset allocation funds thrive in times of uncertainty and for long-term or risk-conscious investors, entering now can offer balanced exposure, built-in diversification, and internal rebalancing without the stress of timing individual asset class moves.
“Diversification across asset classes has always been the key to successful investing. No one can consistently predict market cycles or which asset class will shine during which time. As a smart investor, timing in the market is more important than time in the market. Waiting for the “perfect” market conditions to invest often causes missed opportunities. Hence, you can consider these funds as an integral part of your portfolio for diversification and smart investing,” Jain added.
What are multi-asset allocation funds?
Multi-asset allocation funds are hybrid funds that need to invest a minimum of 10% in at least 3 asset classes. These funds typically have a combination of equity, debt, and gold. Some schemes also add international equities, InvITs and REITs.
The equity allocation in the case of multi-asset funds could vary between 0-70%. Aggressive multi-asset funds could typically have 50-65% equity while the conservative ones could have between 35-50%. In the case of multi-asset funds, some schemes that allocate more than 65% to equity enjoy equity taxation.
But with gold and silver rallying and offering good returns, many investors are willing to invest separately in equity, debt, and gold funds against multi-asset allocation funds.
Thakurta says that investors can categorize the ideal asset allocation across the assets based on their investment goals and having a custom-made asset allocation will give you clean control over your asset allocation & have the flexibility to rebalance it according to your risk profile.
He advices maintaining individual allocations across the assets instead of locking into a single multi-asset fund ensures better liquidity and investors can redeem or rebalance specific portions of their portfolio as per market conditions or cash flow needs, rather than being tied to the fund manager’s allocation decisions.
On the other hand, Jain says that a well-constructed mutual fund portfolio should allocate 20–35% to multi asset allocation funds, letting these vehicles anchor overall risk while participating in growth cycles and these funds will provide a cushion against equity downturns, all while remaining flexible enough to adjust as goals, market outlook, or risk tolerance evolve.
In September, multi asset allocation funds gave an average return of 2.05% with the highest being 5.08% delivered by DSP Multi Asset Allocation Fund.
Gold ETFs gave an average return of 10.12% with Invesco India Gold ETF delivering the highest return of 10.40% in September whereas silver ETFs gave an average return of 14.99% with SBI Silver ETF FOF offering the highest return of around 15.91% in the said time period.
While considering current market valuations and earnings momentum, Thakurta is of the opinion that equities are expected to deliver returns in the range of 12–14% over the coming years, debt instruments are likely to provide stable but moderate returns of around 6–7%, while gold, which has outperformed in recent years amid global uncertainties and sustained central bank buying, is expected to generate 8–10% returns, potentially outperforming debt in the near term.
“The ideal approach for investors is to maintain a balanced portfolio that combines growth-oriented assets with defensive ones ensuring long-term growth, portfolio stability, and liquidity even amid changing market cycles,” said the expert from Anand Rathi Wealth.
Jain adds that Gold and silver have been making record highs due to ongoing geopolitical tensions and persistent inflation. Will this rally continue or its peaking out? No one really can predict. Most experts could not anticipate this rally either. Debt may also benefit as central banks remain cautious.
“Having said that, among multi-asset funds, those with globally diversified equity, robust debt management, and meaningful exposure to precious metals will be good picks for investors who want steady outperformance, especially if market volatility continues,” she added.
One should always invest based on their risk appetite, investment horizon, and goals.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in along with your age, risk profile, and Twitter handle.
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