With the equity market struggling and other asset classes such as gold and silver outperforming, multi-asset funds have gained appeal lately. According to a mutual fund analyst, the number of folios in the category increased about 40 per cent in the last year — from about 26 lakh in September 2024 to over 37 lakh in September 2025. The average AUM of the category has grown nearly 50 per cent to Rs1.48 lakh crore in September this year (Rs1.02 lakh crore). Multi-asset funds are doing well both in terms of performance and fresh inflows, independent market expert Joydeep Sen told businessline. Monthly net inflows over the last six months have been as high as Rs24,620 crore, highlighting growing investor interest.
The growing allocation to multi-asset funds reflects rising investor awareness that different asset classes move in cycles, and that diversification is essential for a healthy portfolio. These funds might be suitable for those investors with a low-risk appetite. “At the same time, investors also understand that they may lack the time or expertise to manage allocation across asset classes on their own,” said another expert. Typically, multi-asset funds, also known as multi-asset allocation funds by some AMCs, invest in at least three asset classes — equity, debt, and gold and silver or real estate.
These funds are a good way for investors to create a well-diversified portfolio across asset classes, leaving it to experts to manage asset allocation, Shruti Jain, Chief Strategy Officer, Arihant Capital Markets, told businessline.
Diversified exposure
There are over two dozen multi-asset funds from various fund houses — with ICICI Prudential Multi-Asset Fund topping the AUM chart with about Rs68,000 crore assets, followed by SBI Multi Asset Allocation Fund and Nippon India Multi Asset Allocation Fund. Explaining the demand for these funds, an MF analyst added that the current environment has made allocating capital increasingly complex. Though the idea of a multi-asset fund is to have a diversified exposure, “demand should be driven by the diversified portfolio, to give optimum risk-adjusted returns,” Sen said. The recent outperformance in gold and silver and the pullback last week have shown that markets often move in cycles.
Sen pointed out that investors are also realising now that when one asset category is volatile, a combination of assets is helpful. For investors with taxation concerns, it is important to note that tax would depend on the allocation. With the precious metals declining over the past week, Jain of Arihant Capital Markets said the correction could slow near-term inflows into multi-asset funds that earlier benefited from the metals’ rally. She noted that as wealth managers rebalance portfolios, inflows may shift temporarily to equities and short-term debt until the outlook on US rate cuts clears. In the near term, she expects further consolidation in gold and silver, but sees gold remaining strong over the medium- to long-term as a preferred hedge.