Multi-Asset Allocation Funds

 

A multi-asset allocation fund is a type of mutual fund that invests in at least three distinct asset classes such as equity, debt, and gold with a minimum allocation of 10% to each as per SEBI guidelines. These funds typically have a combination of equity, debt, and one more asset class like gold, real estate, etc.  including Exchange Traded Funds (ETFs) for equity, debt, and gold

This approach helps reduce risk through diversification and aims to offer balanced returns over time.

Advantages & Disadvantages of Multi Asset Allocation Funds

 

• Lesser risk than most hybrid funds as the investments are spread across multiple asset classes
• Lower allocation to stocks means the returns can fall behind in rising markets
• Suitable for an investment horizon of at least 3 years
• Gain exposure to multiple asset classes in a single fund
• minimum three asset classes
• Provide equity/Non-equity benefits depending on the asset allocation

The latest study by Ventura for the quarter ended June 2025 shows a clear shift in investor preference toward hybrid schemes with diversified and low-risk profiles. Arbitrage funds and multi-asset allocation funds topped the charts in terms of asset under management (AUM) growth.

Arbitrage funds posted a 22.2% jump in AUM compared to the March 2025 quarter, while multi-asset allocation funds recorded a 15.4% surge. Balanced Hybrid/Aggressive Hybrid funds rose 8.9%, followed by Equity Savings funds at 8.2% and Dynamic Asset Allocation/Balanced Advantage funds at 8.1%. Conservative Hybrid funds saw the slowest growth at 3.4%.

Industry experts interpret the numbers as a sign that more investors are looking for stability without sacrificing returns. 

Performance of Multi-Asset Allocation funds

The response of the different asset classes to inflation is different. Equity grows in high growth –high inflation spells, where fixed income class do the opposite and the commodities spikes. Ordinary investors who has no much knowledge and time to manage portfolio these kind of standardized portfolios give ready solutions

Performance of Leading Asset Allocation Funds (Regular) Completed 5 years as on 03 Sep 2025
Scheme Name	Crisil Rating	AuM (Cr)	1Y	2Y	3Y	5Y	10Y
Quant Multi Asset Allocation Fund - Growth	-	3,666.25	4%	23%	20%	26%	17%
ICICI Prudential Multi-Asset Fund - Growth	3	63,001.13	7%	18%	19%	23%	16%
Nippon India Multi Asset Allocation Fund - Growth	-	6,649.41	8%	20%	18%	17%	-
Tata Multi Asset Allocation Fund - Growth	-	4,013.58	4%	15%	14%	17%	-
UTI Multi Asset Allocation Fund - Regular Plan - Growth	-	5,902.09	3%	20%	19%	16%	11%
HDFC Multi-Asset Fund - Growth	-	4,634.55	6%	15%	14%	15%	11%
SBI Multi Asset Allocation Fund - Regular Plan - Growth	-	9,440.30	7%	16%	16%	14%	11%
Axis Multi Asset Allocation Fund - Growth	-	1,499.90	4%	14%	11%	13%	10%

Source: moneycontrol.com/mutual-funds/performance-tracker/returns/multi-asset-allocation.html

Each fund vary in allocation to different classes and so their benchmarks making  a general recommendation meaningless. Over 30 fund houses have this type of schemes under direct & regulare streams

Selecting a particular scheme is a professional activity. Consult your investment advisor before investing

Happy Investing,

Those who read this, also read:

1. Asset Allocation Decision-India