With 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 ₹1.48 lakh crore in September this year (₹1.02 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 ₹24,620 crore, highlighting growing investor interest in the category.
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 industry 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.
“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 industry 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.
There are over two dozen multi-asset funds from various fund houses — with ICICI Prudential Multi-Asset Fund topping the AUM chart with about ₹68,000-crore assets, followed by SBI Multi Asset Allocation Fund and Nippon India Multi Asset Allocation Fund.
Diversified exposure
Explaining the demand for these funds, the MF analyst added that the current environment has made allocating capital increasingly complex.
“The global backdrop remains uncertain, marked by heightened geopolitical and trade tensions that could offer support to precious metals. Domestically, while strong GDP growth bodes well for equities, easing inflation and policy rates may favour fixed income assets,” he added.
It is against this backdrop of diverging trends across asset classes that AMCs are launching multi-asset allocation funds “to help investors navigate this uncertainty by offering them a convenient, dynamically managed way to invest across asset classes taking care of both portfolio diversification and asset allocation in a single fund,” he explained.
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.
Equity-heavy funds (Kotak, Sundaram, HDFC) enjoy equity taxation, while debt-oriented ones (Edelweiss) are taxed at slab rates. For schemes with equity below 65 per cent but above 35 per cent (Nippon India and Quant Multi Asset) that fall into the ‘non-equity non-debt’ category, gains after 24 months would be taxed at 12.5 per cent, while short-term gains would be taxed at slab rates.
With the prices of gold and silver falling over the past week, Jain of Arihant Capital Markets said that this correction could slow near-term inflows into multi-asset funds that saw strong subscriptions when the precious metals were rallying. “As wealth managers rebalance portfolios, inflows could temporarily shift toward equities and short-term debt instruments until the outlook on US rate cuts becomes clearer,” she added.
According to her, in the near term, “we can see further consolidation in the gold and silver prices as investors turn cautious”. However, in the medium- to long-term, gold will continue to stay strong and fund managers will have a tactical allocation towards gold as a hedge.
Published on October 28, 2025
