Are Multi-Asset Allocation Funds A One-Stop Solution For Diversification?

Multi-asset allocation funds have been creating quite a buzz in the mutual fund world. Should you invest in them?

- Kundan Kishore

With the market in a turbulent phase, many experts recommend asset allocation, and investors seem to be paying heed to this bedrock of portfolio management.

This is likely the reason behind the surge in multi-asset allocation funds (MAAFs). This category of funds has captured the spotlight in recent times, driven by consistent inflows over the past year. From April 2024 to March 2025, it received almost double the inflows of ₹34,785 crore compared to the popular Balanced Advantage Fund (BAF) category, which saw inflows of ₹18,558 crore during the same period. In March alone, MAAFs recorded ₹1,670 crore in inflows—the highest among the various hybrid fund segments. It has also posted the strongest growth within the hybrid category over the same period.

Asset allocation has long been considered as a fundamental principle of smart investing. MAAFs provide a one-stop solution for your asset allocation needs. Says D.P. Singh, deputy managing director and joint chief executive officer, SBI Mutual Fund: “MAAFs can serve as a comprehensive, one-stop solution for investors by providing diversified exposure to multiple asset classes such as equities, bonds, commodities (like gold and silver), and international markets (via overseas exchange-traded funds or ETFs, infrastructure investment trusts or InvITs, and real estate investment trusts or Reits) within a single fund. This makes it particularly appealing to those seeking ease of investment, asset allocation, and professional management through one investment avenue.”

What Differentiates MAAFs?