Multi-asset allocation funds in focus amid stellar returns from gold, silver
As gold and silver continue their record-breaking streak, investors appear to be chasing multi-asset allocation funds, anticipating solid returns from the precious metals.
Silver saw stellar gains in 2025, with prices more than doubling last year, while gold offered a return of 60%. Many mutual fund investors who predominantly invest in equities, felt it was a missed opportunity for them.
Market experts and mutual fund advisors explain that an exposure to gold and silver is critical amid prevailing uncertainty and investors must have both metals in their portfolio.
However, both metals are volatile, more so silver, which has witnessed extreme volatility in the last few weeks, falling by more than 10% in a single day. Given this, it is important to seek advice on commodities investments from an expert.
Best suited amid market volatility
Experts say retail investors may consider investing in multi-asset allocation funds to navigate the volatility. These funds invest across asset classes, which include gold, silver, equities and debt and have been generating alpha returns in the last few years.
The Nippon India Multi Asset Allocation Fund Direct Growth has delivered a return of 22.16% in the last one year.
The UTI Multi Asset Allocation Fund Regular Plan Growth has offered a return of 11.52% in the last one year, while the HDFC Multi Asset Allocation Fund Growth has returned 13.56% in the last one year.
Besides giving investors exposure to gold and silver, multi-asset allocation funds offer a host of other benefits, with diversification being the key.
These funds spread the investment across different asset types, which cushions against poor performance in any one asset class, thus reducing overall portfolio risk.
Besides, multi-asset allocation funds balance higher-risk assets like equity with safer assets like debt, lowering volatility and protecting capital during downturns.
Investors also benefit from the convenience of exposure to multiple asset classes through a single fund, eliminating the need to manage individual investments. This also leads to tax efficiency, as investors don’t need to switch between funds to chase growth in a particular asset class.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.