Multi-asset allocation funds from the hybrid category have grown much faster than flexi-cap funds from the equity category over the past three years, although flexi-cap funds remain larger in terms of AUM and folios.
Multi-asset funds must invest at least 10% each across three or more asset classes, such as equity, debt and gold. However, flexi-cap funds invest at least 65% in equity across large-, mid- and small-cap stocks.
With both categories offering diversification, should investors hold both or choose one? Here’s what experts say.
How have the two categories grown?
| Particulars | Flexi-cap | Multi-asset allocation |
| No. of Schemes (Aug 2023) | 36 | 13 |
| No. of Schemes (Aug 2026) | 46 | 36 |
| AUM (Aug 2023) | ₹2.84 lakh crore | ₹35,288 crore |
| AUM (Aug 2026) | ₹6.11 lakh crore | ₹2.07 lakh crore |
| AUM growth | 115% | 487% |
| Folios (Aug 2023) | 1.30 crore | 12.19 lakh |
| Folios (Aug 2026) | 2.48 crore | 60.17 lakh |
| Folio growth | 91% | 394% |
| August inflow (2023) | ₹2,193 crore | ₹1,617 crore |
| August inflow (2026) | ₹5,059 crore | ₹3,671 crore |
| Inflow growth | 131% | 127% |
| 1-year return | 2.12% | 8.70% |
| 3-year return | 10.18% | 13.48% |
| 5-year return | 9.91% | 11.94% |
*Source: AMFI & Value Research, Data as on 31 August 2026, Category Average CAGR as on 11 September 2026
What’s driving the shift toward multi-asset funds?
Eshaan Lazarus, Founder & CEO, 021 Trade, noted that recent returns, diversification and the convenience of holding multiple assets in one fund are likely influencing investor decisions.
Ajay Kumar Yadav, CFPCM, Group CEO & CIO, Wise Finserv, attributed the shift to a combination of diversification, recent performance and convenience.
Sougata Basu, Founder and CEO, CashRich, highlighted that gold and silver outperformed equities in 2025, benefiting multi-asset funds with exposure to these assets. Flexi-cap funds, which do not invest in these assets, missed this rally.
Tanwir Alam, Founder & CEO, Fincart, pointed to a behavioural shift among newer investors who prefer having equity, debt and gold managed within a single multi-asset fund.
Are investors dropping flexi-cap funds for multi-asset funds?
Not necessarily. Multi-asset schemes increased from 13 to 36 in three years, suggesting that much of the category’s growth came from new launches and NFOs rather than investors exiting flexi-cap funds, Alam noted.
In absolute terms, flexi-cap funds remain significantly larger, with nearly three times the AUM and more than four times the folios of multi-asset allocation funds as of August 2026. However, inflow growth has remained broadly comparable across the two categories.
AMFI’s August data shows no new multi-asset launches, yet the category attracted about ₹3,700 crore, indicating genuine demand for existing schemes. There is some switching at the margin, usually by investors who sat through a flat equity year and want a smoother ride, Basu added.
When does adding a multi-asset fund help a flexi-cap investor?
Yadav highlighted that investors with portfolios heavily tilted towards equity and limited exposure to debt or gold may benefit from adding a multi-asset fund.
Look at the multi-asset fund’s current allocation, not its name. If the fund is running a high equity share and the investor already holds equity, most of the new money is overlap. If the investor’s portfolio is all equity and the fund is holding 40% in debt and gold, that 40% is the diversification, Basu explained.
Should investors choose both or only one?
Check the combined equity, debt, and gold exposure, portfolio overlap, costs, debt quality, and allocation limits of both funds, Lazarus noted.
Alam suggested looking at the overall asset allocation rather than the number of funds in your portfolio. Map out your total equity, debt, and gold exposure across both funds and compare that to what your goals actually need. If it’s balanced, both can coexist comfortably. If one is duplicating the other, trim it.
“Flexi-cap is primarily a wealth-creation allocation. Multi-asset is primarily a wealth-creation plus asset-allocation solution,” Yadav said.
When can multi-asset funds be a bad choice?
Multi-asset funds may add little if an investor already holds a suitable mix of equity, debt, gold and other assets such as REITs, and rebalances the portfolio regularly.
They can duplicate existing holdings and make the overall portfolio harder to track. However, they may be useful for investors who want to consolidate investments and delegate asset allocation to a fund manager, Lazarus noted.
Who can consider only a multi-asset fund?
A multi-asset fund can suit investors seeking a simple, low-maintenance portfolio instead of managing separate equity, debt, and gold investments.
“One fund and one SIP can keep things simple, with the asset mix managed by the fund manager,” Basu said.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
About the Author
Sheetal Goel is a Content Producer at Livemint, where she covers corporate developments, personal finance, business trends, markets, and SEBI-related updates. She focuses on simplifying complex financial concepts and presenting them in a clear, reader-friendly manner, thereby helping audiences better understand investment trends, personal finance, and market developments. Her writing focuses on making finance more accessible to everyday readers while maintaining clarity, accuracy, and relevance.
She holds a degree in Economics (Hons.) along with an MBA in Finance, which has helped her develop a strong foundation in financial analysis, market understanding, and business reporting. Before joining journalism, she worked with finance and broking firms, where she closely followed market developments, investment strategies, and evolving industry trends. This practical exposure strengthened her understanding of financial markets. She has also written content across multiple formats and platforms, including YouTube, LinkedIn, and Instagram.
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