Multi-asset funds accounted for ₹10,000 crore of these inflows, while arbitrage and other hybrid funds contributed ₹3,200 crore, taking cumulative FYTD arbitrage flows close to ₹70,000 crore.
Industry experts attributed the trend to investors’ desire to hedge against equity volatility, particularly following periods of geopolitical uncertainty and swings in global markets.
Sandeep Bagla, CEO of TRUST Mutual Fund, noted that investors are using multi-asset and hybrid funds as protective instruments.
Anand Vardarajan, Chief Business Officer at Tata AMC, highlighted that multi-asset funds, which combine equities, commodities, and precious metals, have become one of the fastest-growing categories as investors seek balanced exposure across asset classes.
He added that hybrid funds, especially arbitrage strategies, remain attractive for low-risk, tax-efficient returns, even as spreads have moderated.
Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital, observed that strong inflows into multi-asset funds reflect cautious investor behaviour, with allocations shifting to safer, diversified products despite compelling large-cap equity opportunities.
Ankur Punj, MD and Business Head at Equirus Wealth, noted that multi-asset and hybrid allocations are being used as portfolio stabilisers, signalling disciplined, long-term investment strategies in uncertain market conditions.
The recent surge in multi-asset fund inflows is also linked to volatility in commodity markets. In the past few months, silver delivered triple-digit returns but fell 25% in a single trading session, while gold corrected nearly 10%, highlighting the risks of concentrating investments in individual metals.
Multi-asset allocation funds, which invest across equities, debt, and commodities including gold and silver, offer a diversified and balanced alternative, reducing portfolio risk.
Data shows that top multi-asset allocation funds have delivered robust returns in recent years. Leading funds, such as Nippon India Multi Asset Allocation Fund, reported 1-year, 2-year, and 3-year returns of 23.97%, 20.47%, and 22.62% respectively. On average, the top 10 multi-asset funds achieved a CAGR of around 20–21% over three years, outperforming the top equity funds, which returned 16.6% over one year.
By providing exposure to multiple asset classes through a single fund, multi-asset allocations offer both diversification and convenience, especially during periods of market volatility.
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