What Multi-Asset Funds Do
Multi-asset allocation funds are mandated to hold at least 10% each in equity, debt, and one additional asset class (typically gold or REITs). In practice, many funds run 60–70% equity, 15–20% debt, and 10–15% gold — a naturally diversified portfolio in a single wrapper.
Performance in 2025
Multi-asset funds delivered an average 14.2% return in FY26, outperforming pure large-cap funds (12.8%) while with lower drawdowns. The gold allocation, up 19% in rupee terms, provided the cushion during the February 2026 equity correction.
Tax Consideration
If a multi-asset fund maintains 65%+ in equity (including arbitrage), it qualifies for equity taxation (STCG at 20%, LTCG at 12.5% after one year). Check the fund's actual allocation before investing, as some funds rotate below 65% equity, triggering slab-rate taxation on gains.