Speaking to CNBC-TV18, B. Gopkumar, MD & CEO of Axis AMC, said that retail investors have decisively broadened their allocation frameworks after years of relying primarily on domestic equity funds. The momentum, he noted, has been particularly strong in asset-allocation products and precious metals.
Gold and Silver Become Core Retail Allocations
Gold and silver have moved from being tactical hedges to becoming structural components of investor portfolios. Gopkumar said demand for precious metals has intensified over the last two years, culminating in “breathtaking flows” in the last few months as prices hit new highs.
“Gold and silver have become very prominent allocations in customer portfolios—either through dedicated gold and silver funds or through multi-asset strategies,” he said. The shift reflects both risk aversion and the search for stability amid uneven equity performance through the year.
A string of macro triggers has strengthened the case for precious metals—geopolitical uncertainty, global rate expectations, and dollar volatility—driving investors to products that offer downside protection.
Hybrid and Multi-Asset Funds Gain Traction
For investors looking to manage risk without exiting markets, hybrid categories have emerged as preferred structures. Balanced Advantage Funds (BAFs) and multi-asset allocation funds have seen steady inflows through 2025 as investors seek smoother return profiles.
“These are asset-allocation products. The idea is to balance exposure across asset classes given the volatility in equities. Retail investors have substantial allocation to BAFs in their portfolios,” Gopkumar said.
Multi-asset funds, in particular, have risen sharply in popularity because they automatically adjust between equities, debt, and precious metals—capturing market opportunities while mitigating risk.
Global Investing Goes Mainstream—Despite Regulatory Constraints
While domestic multi-asset and precious metal products gained momentum, Indian investors also leaned toward global diversification, driven by both aspiration and education. Social media awareness and a broader understanding of global market cycles have played a role.
“Indians have become much more aspirational. People are aware of how global equities work, and there is a fair amount of buzz around it. We continuously get asked how to invest in global funds,” Gopkumar noted.
Despite caps on overseas fund inflows, some AMC products—such as Axis AMC’s China fund and US-focused strategies—remain open and continue to attract steady allocations. “We still see continuous flows into our China-dedicated fund and our Growth Avenues fund that invests in US equities,” he said.
For investors, global funds serve two needs: diversifying away from domestic concentration and gaining access to sectoral themes—AI, technology, healthcare—that are underrepresented in the Indian markets.
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Arbitrage Funds Benefit, But Fixed Income Still Lags
While diversified and global products are gaining share, fixed-income mutual funds have yet to see a meaningful revival. The removal of tax advantages for debt funds has pushed retail investors toward alternatives such as arbitrage funds for systematic transfer plans (STPs).
“Comparable products like fixed deposits exist, and fixed-income MFs are superior from a product standpoint. But from a retail perspective, they have not gained traction,” Gopkumar said. Arbitrage funds, however, continue to attract inflows from investors seeking a low-volatility entry point into equity markets.
The New Retail Playbook: Diversify Across Borders and Across Assets
The evolving mix of retail money—gold, silver, hybrids, global equities, and tactical strategies—signals a structural transition in investor behaviour. Indian investors are no longer relying on single-asset bets or chasing only high-return equity categories.
“All of this reflects a more mature, risk-aware investor base,” Gopkumar said. “People are looking at proper asset allocation and want to diversify risk across asset classes.”
As 2026 approaches, the resilience of domestic flows suggests that diversification is no longer just an advisory recommendation—it is becoming the central framework through which India’s new generation of investors is building long-term wealth.
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Watch accompanying video for entire discussion.