MAAFs Attract ₹38,027 Cr Inflows Fueled by Gold Rally

Multi-Asset Allocation Funds (MAAFs) have captured significant investor interest, primarily boosted by their exposure to gold and other commodities. This surge follows gold’s robust performance throughout 2025, drawing substantial capital into these diversified schemes.

Adil Chacko, Executive Director at Anand Rathi Wealth Limited, noted that the category’s popularity directly correlates with its strong returns, which were significantly enhanced by gold. The precious metal’s rally in 2025 was attributed to strong central-bank buying, persistent geopolitical tensions, and increased safe-haven demand amidst global uncertainties.

Inflow Dynamics and Performance

Between January and June 2026, MAAFs recorded nearly ₹38,027 crore in inflows, significantly outpacing the ₹5,586 crore attracted by Balanced Advantage Funds (BAFs) during the same period. The initial three months of 2026 alone saw ₹24,000 crore flow into MAAFs.

This preference is partly due to recency bias, as MAAFs delivered average returns of 15-17% in 2025. However, Chacko cautioned against assuming consistent commodity-driven returns, highlighting their cyclical nature and potential for higher portfolio volatility, often underperforming equities over the long term.

Asset Allocation and Market Cycles

MAAFs are mandated to invest a minimum of 10% in at least three distinct asset classes, typically including equity, debt, and commodities such as gold and silver. This contrasts with BAFs, which dynamically adjust their allocations primarily between equity and debt based on prevailing market conditions.

Recent gold price consolidation has moderated its contribution to MAAF returns, leading to a comparatively subdued performance for these funds. This underscores the need for investors to evaluate multi-asset funds across various market cycles rather than focusing solely on short-term gains.

A performance snapshot for July 2026 revealed mixed, yet generally positive, outcomes across the category. The Canara Robeco Multi Asset Allocation Fund led monthly returns with 2.71%. Over a one-year period, Kotak Multi Asset Allocation achieved 21.59%, while Quant Multi Asset excelled over three years with 22.50%.

Despite these figures, recent six-month returns have been uneven, with some funds experiencing negative performance. Investors are advised to align their decisions with long-term financial goals and risk profiles, avoiding choices based solely on recent market performance.