Multi-asset funds outperform equities: Why investors are choosing MAAFs over others

Multi-asset allocation funds (MAAFs) are emerging as one of the most resilient categories in the mutual fund (MF) universe, delivering returns that rival or even surpass traditional equity schemes while maintaining a comparatively lower risk profile. Their ability to invest flexibly across equities, debt, and commodities has enabled them to outperform in both lump sum and systematic investment plan (SIP) investments, particularly over the past three years.

According to data from Value Research, multi-asset funds generated an average annualised three-year return of 19.1 percent, outperforming flexicap funds at 18.2 percent and largecap funds at 16.8 percent. The outperformance is equally pronounced in SIP returns, with data showing MAAFs delivering 17.7 per cent annualised returns from monthly SIPs over three years, compared with 15.1 per cent for flexicaps and 13.4 per cent for largecaps.

Industry experts attribute this superior performance to stellar results in the past year, thanks largely to sharp rallies in gold and silver. With gold appreciating by about 53 per cent and silver by nearly 60 per cent, MAAFs that allocated to these commodities saw a significant boost to overall returns. Simultaneously, decent fixed income performance contributed additional stability, allowing these funds to strike a balance between growth and protection.

Investor flows reflect this changing preference. Between August 2024 and July 2025, MAAFs attracted net inflows of over ₹37,000 crore, significantly outpacing the ₹19,600 crore that moved into balanced advantage funds during the same period. In July 2025 alone, MAAFs (excluding NFO collections) drew a record ₹4,338 crore, highlighting the growing appetite for this category.

NFOs

Adding to the momentum, Groww Mutual Fund launched its Groww Multi Asset Allocation Fund on September 10, 2025. The open-ended scheme will invest across equities, debt, gold, silver, and real estate-linked instruments such as REITs and InvITs. Its stated aim is to provide long-term capital growth while reducing portfolio volatility through broad diversification.

During the new fund offer (NFO) period, units are priced at ₹10 each, with the scheme set to reopen for continuous sale and repurchase on or before October 9, 2025. Investors can begin with a minimum of ₹500, with SIP options starting from as little as ₹100 on a daily or weekly basis or ₹500 monthly.

The fund’s asset allocation spans 10–80% in equities, 10–80% in debt and money market instruments, 10–50% in gold, silver, and commodity ETFs or derivatives, and up to 10% in REITs and InvITs. With gross equity exposure maintained above 65%, taxation will follow equity rules. The scheme will benchmark its performance against a blended index comprising Nifty 500 TRI (60%), CRISIL Composite Bond Fund Index (30%), and domestic gold and silver (5% each).

The Groww fund will be managed by Paras Matalia (equities), Kaustubh Sule (debt), and Wilfred Peter Gonsalves (commodities).

With their unique mix of growth potential, risk diversification, and strong recent track record, multi-asset allocation funds are quickly cementing their place as one of the most compelling options for Indian investors navigating uncertain markets.

Other MAAFs

Investors evaluating multi-asset allocation funds can draw useful insights from recent performance trends. Based on one-year returns, the top performers include WhiteOak Capital Multi Asset Allocation Fund (15.76%), DSP Multi Asset Allocation Fund (14.29%), and Mahindra Manulife Multi Asset Allocation Fund (12.85%). Over a three-year horizon, Quant Multi Asset Allocation Fund (22.55%) and Nippon India Multi Asset Allocation Fund (22.44%) emerged as consistent outperformers. Extending the view to five years, Quant Multi Asset Allocation Fund again stood out with an impressive 27.76% return, reinforcing its long-term strength. These figures highlight how certain funds maintain leadership across different time frames, offering investors a mix of short-term momentum and long-term reliability in diversified portfolios.

Top Performing Mutual Funds by Returns

1-Year Returns (Top 3):
1. WhiteOak Capital Multi Asset Allocation Fund – Direct Plan : 15.76%
2. DSP Multi Asset Allocation Fund – Direct Plan              : 14.29%
3. Mahindra Manulife Multi Asset Allocation Fund – Direct Plan: 12.85%

3-Year Returns (Top 3):
1. Quant Multi Asset Allocation Fund – Direct Plan            : 22.55%
2. Nippon India Multi Asset Allocation Fund – Direct Plan     : 22.44%
3. (No third fund available with 3-year data)

5-Year Returns (Top 3):
1. Quant Multi Asset Allocation Fund – Direct Plan            : 27.76%

Disclaimer: Business Today provides market and personal news for informational purposes only and should not be construed as investment advice. All mutual fund investments are subject to market risks. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.