Amid increasing uncertainty in global markets fueled by trade tariffs and geopolitical tensions, mutual fund investors are increasingly turning to multi-asset and dynamic allocation funds for stability.
Inflows into hybrid multi-asset allocation funds surged by 37% in the June quarter, reaching ₹8,243 crore, compared to ₹6,022 crore in the March quarter. Additional inflows were recorded at ₹6,197 crore and ₹3,528 crore in July and August, respectively. Meanwhile, investments in dynamic asset allocation funds rose to ₹3,903 crore in the June quarter, up from ₹2,953 crore in March. This upward trend continued with inflows of ₹2,611 crore and ₹2,316 crore in July and August, respectively.
Multi-asset allocation funds typically invest in a combination of equity, debt, gold, and silver, while dynamic asset allocation funds adjust their exposure between equity and debt based on market valuation. Assets under management (AUM) for multi-asset funds saw a significant increase of 27% in August, climbing to ₹1.32 lakh crore from ₹1.04 lakh crore, largely driven by rising gold and silver prices. Dynamic asset allocation fund AUM also experienced growth, rising 7% to ₹3.04 lakh crore from ₹2.83 lakh crore.
In the multi-asset category, Nippon Mutual Fund and ICICI Mutual Fund have reported the highest annualized returns of 22% and 20%, respectively, over the past three years, while other funds have achieved returns between 13% and 20%. For dynamic asset allocation, HDFC Mutual Fund and Franklin Templeton have delivered 20% and 15% returns, respectively, contributing to the industry’s total AUM increase to ₹3.05 lakh crore.
DD Sharma, Managing Director of MF King, emphasized that the inclusion of precious metals can serve as both a hedge and a tactical opportunity in the context of heightened market volatility and ongoing inflation concerns. He noted that hybrid funds provide a structured investment approach, allowing investors to remain engaged without needing to make specific timing decisions in response to unpredictable global market cycles.
Published on September 19, 2025.
