Investing in equities is undoubtedly risky, making equity mutual funds a less suitable option for conservative investors. However, those who seek the growth potential of equities while keeping risk lower by also investing in safer asset classes, such as debt, may consider hybrid mutual funds.
There are several subcategories of hybrid mutual funds, including conservative hybrid funds, balanced hybrid funds, dynamic asset allocation funds, arbitrage funds, equity savings funds, and others.
However, one category of mutual fund that provides exposure to almost all asset classes — equity, debt, and commodities such as gold- is the multi-asset allocation fund.
Here we give a lowdown on this mutual fund category:
What are multi-asset allocation funds?
For those who are not aware, multi-asset allocation funds refer to mutual funds that invest in at least three asset classes with a minimum allocation of at least 10% in each asset class.
There are around 30 schemes in this category (in contrast with 35 in the category of dynamic asset allocation funds) with total assets under management (AUM) amounting to ₹1.32 lakh crore as on 31 August 2025.
There was a net inflow of ₹3,527 crore into these schemes in August alone, which indicates the popularity of these schemes.
Why should you invest?
One of the key reasons to invest in these schemes is that they provide exposure to multiple asset classes including equity, debt and gold. While gold prices have hit all time highs, these mutual funds – besides gold ETF funds – enable investors to make the most of this rally.
Some popular multi-asset allocation mutual funds include Aditya Birla Sun Life Multi Asset Allocation Fund, Axis Multi Asset Allocation Fund, HDFC Multi Asset Fund, ICICI Prudential Multi Asset Fund, Mirae Asset Multi Asset Allocation Fund, Nippon India Multi Asset Allocation Fund and SBI Multi Asset Allocation Fund.
Meanwhile, if you want to invest in multi-asset funds purely to get exposure to one of the three asset classes, then it is recommended that you invest in an asset-specific category—say, a gold ETF mutual fund, a debt fund, or an equity mutual fund.
“Rather than investing in one hybrid mutual fund, one should invest strategically across asset classes based on one’s own risk appetite. That would be better in the long run. After all, different asset classes perform in different period of time. Gold and equity also do not usually go in parallel,” says Sridharan S., Sebi-registered investment advisor and founder of Wealth Ladder Direct.
Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.
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