For Indian investors looking to diversify their portfolio, multi-asset allocation mutual funds have emerged as a compelling option in 2025. While past performance is never a surefire indicator of future results, analysing historical returns is a critical first step in the investment selection process. This year, several funds in this category have posted impressive annualised gains, with some even crossing the 20% mark.
What Are Multi-Asset Allocation Funds?
Multi-asset allocation funds are a category of mutual funds designed to spread investment risk and opportunity across various asset classes. Instead of concentrating on just stocks or bonds, these schemes invest in a mix that typically includes equity, fixed income instruments, index-tracking funds, financial derivatives, and commodities like gold. This broad diversification aims to smooth out volatility and provide more stable returns over different market cycles, making them suitable for investors with a moderate risk appetite seeking growth with some cushion.
Top Performers of 2025: A Detailed Look
The year 2025 has seen strong performance from several multi-asset allocation funds. Leading the pack is the DSP Multi Asset Allocation Fund, which delivered an outstanding annualised return of 22.61%. It is closely followed by the Kotak Multi Asset Allocation Fund at 21.98% and the Mahindra Manulife Multi Asset Allocation Fund at 20.73%.
Other notable schemes that have provided robust returns include:
- Sundaram Multi Asset Allocation Fund: 19.67%
- Union Multi Asset Allocation Fund: 19.72%
- Bandhan Multi Asset Allocation Fund: 19.31%
- Bajaj Finserv Multi Asset Allocation Fund: 19.15%
- Nippon India Multi Asset Allocation Fund: 19.15%
- SBI Multi Asset Allocation Fund (MAAF): 18.86%
- Aditya Birla Sun Life Multi Asset Allocation Fund: 18.71%
- Mirae Asset Multi Asset Allocation Fund: 18.06%
- ICICI Prudential Multi Asset Fund: 18.01%
Beyond the Numbers: Key Considerations for Investors
While the returns table paints an attractive picture, seasoned investors know that past performance does not guarantee future results. A fund's stellar track record in one year may not necessarily repeat in the next due to changing market dynamics. Therefore, it is imperative to look at a holistic set of factors before committing your capital.
Experts recommend evaluating the fund manager's experience and historical performance, especially for actively managed schemes. The overall macroeconomic environment, the fund's expense ratio, and its asset allocation strategy are other critical elements to scrutinise. Ultimately, an investment decision should align with your individual financial goals, risk tolerance, and investment horizon.
Disclaimer: This information is for educational purposes only. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully or consult a SEBI-registered investment advisor before making any investment decision.
