Interest in multi-asset allocation funds surged in 2026 driven by gold and silver gains, but recent shifts reveal the challenges of sustaining performance amid changing commodity trends and market cycles.
Interest in multi-asset allocation funds has risen sharply this year as investors have chased the returns generated by gold and silver alongside a patchier run from equities. Business Today reported that the appeal of these funds has been driven in part by their built-in exposure to at least three asset classes, usually equity, debt and commodities, with a minimum 10% in each. That structure has helped them benefit from strong central-bank buying of gold, geopolitical tension and the safe-haven trade that dominated much of 2025.
But the recent surge has also exposed a familiar risk: performance chasing. According to the article, multi-asset allocation funds drew nearly ₹38,027 crore in inflows between January and June 2026, far ahead of the roughly ₹5,586 crore that went into balanced advantage funds. The category had already pulled in close to ₹24,000 crore in the first three months of 2026 after delivering average returns of about 15% to 17% in 2025. Industry data cited by Business Today showed that the momentum began to cool once gold stopped rising as quickly and started trading in a narrower range.
That shift matters because fund houses have not been standing still. A Business Standard report in May said multi-asset managers had trimmed their gold and silver positions over the previous year, with average commodity exposure falling from 17% in March 2025 to 13% in April 2026 as prices climbed and equity valuations became more attractive. In other words, the precious-metals boost that helped drive returns in 2025 is not guaranteed to repeat. Trustnet’s recent coverage of the global market also suggested that consistently strong multi-asset funds are relatively rare, underlining how difficult it is to sustain top-quartile results across multiple market cycles.
The latest performance snapshot was mixed. Canara Robeco’s multi-asset fund led July with a 2.71% return, followed closely by Bajaj Finserv, Quantum, Axis and UTI. Over 1 year, Kotak was the standout, while Quant led on a 3-year basis. Yet several funds posted negative 6-month returns, including Quant, Bajaj Finserv and Sundaram. That is why analysts warn investors not to buy these products simply because they have recently outpaced other hybrid funds. As Business Today quoted mutual fund adviser Suresh Chacko, commodities such as gold and silver are cyclical, can add volatility and often lag equities over the long run. The better test, he said, is whether a fund fills a genuine portfolio gap or merely duplicates holdings an investor already owns.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
