Investing in the right fund is essential to maintain balanced returns, especially during fluctuating markets. Multi Asset Allocation Funds (MAAFs), which allow investors to spread investments across multiple asset types like equity, debt, and gold, have gained remarkable traction among Indian investors. The top 5 performing multi asset funds have showcased steady returns over 3, 5, and even 10 years, becoming a favored choice for those looking for stability alongside growth potential.
Here’s a detailed look at what makes multi asset funds an appealing choice for many investors and how they have performed consistently across various timelines.
Why Multi Asset Funds Stand Out in India’s Investment Landscape
The primary appeal of multi asset funds lies in their diversified portfolio strategy. Unlike other hybrid funds, MAAFs spread investments across equity, debt, and gold, allowing for a balance between growth potential and stability. Furthermore, in recent years, many multi asset funds have also started including alternative investments like Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), which offer investors an additional layer of asset diversification.
Dynamic Asset Allocation During Market Volatility
One of the biggest benefits of MAAFs is their flexibility. Fund managers of multi asset funds adjust the portfolio allocations dynamically based on current market conditions. This responsive strategy enables these funds to optimize returns during various market cycles while managing risk effectively. Such flexibility provides investors with balanced returns, even in volatile market conditions, which has led to a rise in their popularity.
Top Performing Multi Asset Funds with Consistent 3-Year Returns
When looking for short to medium-term investments, MAAFs offer excellent options with steady returns. Below are the top five multi asset funds based on their 3-year average annual returns:
- Quant Multi Asset Fund (Direct Plan) – 23.15%
- ICICI Prudential Multi Asset Fund (Direct Plan) – 20.00%
- UTI Multi Asset Allocation Fund (Direct Plan) – 18.67%
- Nippon India Multi Asset Allocation Fund (Direct Plan) – 16.36%
- SBI Multi Asset Allocation Fund (Direct Plan) – 15.63%
These funds have outperformed various other hybrid fund types, such as aggressive hybrid funds and balanced advantage funds, in recent years.
Top Multi Asset Funds with 5-Year Returns
For those who prefer a slightly longer investment horizon, here are the top-performing MAAFs based on their 5-year annual returns:
- Quant Multi Asset Fund (Direct Plan) – 28.93%
- ICICI Prudential Multi Asset Fund (Direct Plan) – 22.45%
- HDFC Multi Asset Fund (Direct Plan) – 17.23%
- UTI Multi Asset Allocation Fund (Direct Plan) – 17.00%
- SBI Multi Asset Allocation Fund (Direct Plan) – 15.35%
Over this period, multi asset funds have provided superior returns compared to traditional mutual funds, demonstrating their capability to handle market volatility effectively.
Long-Term Returns: 10-Year Performance of Top Multi Asset Funds
For investors with a long-term view, the consistency of multi asset funds over a decade is noteworthy. Here’s how the top funds have performed over the last 10 years:
- Quant Multi Asset Fund (Direct Plan) – 17.87%
- ICICI Prudential Multi Asset Fund (Direct Plan) – 15.55%
- SBI Multi Asset Allocation Fund (Direct Plan) – 15.55%
- HDFC Multi Asset Fund (Direct Plan) – 11.97%
- Axis Multi Asset Allocation Fund (Direct Plan) – 11.64%
This long-term performance demonstrates the robustness of multi asset funds, as they manage to keep returns stable while mitigating risk across changing market conditions.
Who Should Consider Multi Asset Funds?
Multi asset funds are particularly suited for investors looking for a balanced risk-return profile. The diversified nature of these funds allows investors to navigate through market ups and downs with greater stability than a typical equity-only or debt-only fund. Additionally, MAAFs offer the potential for steady income generation by investing a part of the corpus in debt and gold, adding security against market downturns.
Ideal for Investors Looking for Stable Growth with Moderate Risk
For those new to investing, multi asset funds provide a reliable way to diversify within a single scheme. The minimum allocation in three asset classes (equity, debt, and gold) means that investors are not overly exposed to any single market fluctuation, which provides a safer foundation than investing solely in equities. However, these funds do carry a high or very high-risk rating, as they remain partially invested in equity markets, making them ideal for moderately risk-tolerant investors.
A Resilient Option During Market Volatility
Market fluctuations can often lead to high stress and uncertainty for investors. However, with a dynamic allocation strategy, multi asset funds have been able to deliver solid performance even in challenging times. These funds adjust their exposure to different asset classes based on real-time market analysis, offering a blend of safety and growth.
Important Factors to Remember Before Investing in Multi Asset Funds
Although MAAFs offer a balanced approach, investors need to keep in mind a few considerations:
- Past performance does not guarantee future results: Though multi asset funds have performed well over various timelines, past returns should not be taken as a prediction for future returns.
- Understand your risk tolerance: MAAFs generally have a moderate to high-risk level due to equity exposure. Investors should assess their risk tolerance and financial goals before investing.
- Seek professional advice: It is always advisable to consult an investment advisor who can guide you based on your unique financial situation.
Multi asset funds are an excellent option for those seeking stability with the growth potential. Through their diversified structure, dynamic allocation, and long-standing consistency in returns, these funds present a valuable investment option for both new and seasoned investors.
