Multi-asset funds lead hybrid fund SIP returns at 18.66%

Multi-asset funds have demonstrated their superior performance across shorter timeframes as well, with 360 ONE Multi Asset Allocation Fund leading the one-year performance with a 27.1% return, followed by Kotak Multi Asset Allocation Fund at 22.2%, Quant Multi Asset Allocation Fund at 21.2%, and DSP Multi Asset Allocation Fund at 20.7%, according to Value Research data. When compared to other hybrid categories, multi-asset funds significantly outperformed aggressive hybrid funds such as Bank of India Mid & Small Cap Equity & Debt Fund at 14.9% and Quant Aggressive Hybrid Fund at 12.3%. HSBC Equity Savings Fund returned 9.6%, while balanced advantage funds Baroda BNP Paribas Balanced Advantage Fund and Aditya Birla Sun Life Balanced Advantage Fund gained 9.2% and 8.7% respectively. As per Mint, these funds benefit from exposure to gold and silver, which have posted 60% and 108.5% returns respectively over the past year, along with tactical allocation shifts between asset classes.

At the opposite end of the performance spectrum, balanced advantage funds recorded the lowest three-year SIP returns among the highlighted funds. Motilal Oswal Balanced Advantage Fund recorded the lowest return of 2.29%, while Shriram Balanced Advantage Fund followed at 2.81%. The other two funds with poor performance were HDFC Aggressive Hybrid Fund at 3.28% and Sundaram Conservative Hybrid Fund at 3.71%. According to Mint, balanced advantage funds dynamically manage allocation between equity and debt without fixed ranges, while aggressive hybrid funds invest 65-80% in equity and 20-35% in debt, and conservative hybrid funds allocate 10-25% to equity.

According to Anthony Heredia, managing director and CEO of Mahindra Manulife Mutual Fund, "Most of the outperformance has been driven by exposure to gold and silver as well as tactical increase or decrease in allocations into equities." Hari Shyamsunder from Templeton Global Investments explains that the recent outperformance stems from diversification benefits, as "their return and risk are not tied to equities alone." He adds that gold and silver prices have rallied strongly, while debt has provided carry and stability during muted broad-market equity returns. The ability to rebalance across equities, gold, silver and debt as market leadership shifts allows multi-asset funds to make volatility work in their favor rather than simply ride it out. However, as reported by Mint, the equity-fund money rush in India has started to cool, with net inflows into Indian equity mutual funds tapering from ₹42,672.63 crore in July 2025 to ₹24,685.47 crore by July 2026.

According to the latest AMFI data for July 2026, there are 186 schemes in the hybrid fund category, with arbitrage funds having the highest number at 39 schemes. The wide gap between highest and lowest three-year SIP returns demonstrates that hybrid funds are not a uniform category, with return profiles varying significantly depending on asset allocation and investment strategies. Market participants suggest that a customized benchmark combining broad-based equity index with bonds, gold and silver provides a more accurate yardstick for multi-asset funds compared to the Nifty 50 alone. Kotak AMC uses a benchmark reflecting 65% Nifty 500, 10% gold and silver, and 25% debt, while Franklin India Multi Asset Allocation Fund follows 65% Nifty 500, 20% short-duration debt, and 5% each in gold, silver and a broad commodity index. The recent surge in equity exposure among balanced advantage funds reflects improved market conditions and fund managers' confidence in equity valuations, though cooling inflows suggest investors are becoming more selective about diversification benefits.