Multi-asset funds score big as gold, REITs and InvITs boost returns
The outperformance has been aided by strong returns from asset classes outside equities, particularly precious metals. Domestic gold prices have risen around 45% over the past year and 150-160% over three years, translating into annualised returns of roughly 36-38% over the three years.
Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) have also contributed, with the Nifty REITs & InvITs index returning around 13% over one year and 12.5% annualised over three years.
ET BureauExposure to these assets has helped multi-asset funds navigate the relatively weak performance of equities, while giving fund managers opportunities to shift allocations depending on market conditions.
“Opt for a multi-asset fund which has higher flexibility to buy other low-correlated assets like fixed income, gold, InvITs and foreign equity,” said Manuj Jain, co-founder, ValueMetrics Technologies. Jain said an equity allocation of 35-65% gives fund managers greater room to move into assets such as gold, silver, InvITs or REITs when opportunities emerge.
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Retail investors have increasingly taken to these funds, making multi-asset funds one of the fastest-growing mutual fund categories. Assets under management have surged six-fold to ₹2.2 lakh crore in July 2026 from ₹36,097 crore in August 2023.Some multi-asset funds typically keep 65-70% in unhedged equities, with the rest spread across fixed income, precious metals, REITs and InvITs. The higher equity exposure can also provide favourable equity taxation, with long-term capital gains taxed at 12.5% after the stipulated holding period.
Another set keeps equity exposure at 35-65%, giving fund managers greater leeway to allocate to other asset classes depending on market conditions.
“Study the fund manager’s track record in shifting allocation across asset classes. This active rebalancing is what you’re really paying for,” said Kunal Valia, founder, Statlane, a Sebi-registered research analyst.
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