Multi-asset allocation Funds Tops Balance Advantage Funds
In terms of net inflows, multi-asset allocation funds (MAFs), a relatively unknown hybrid mutual fund (MF) category until early 2023, have surpassed balanced advantage funds (BAFs), a more common hybrid investment option, in 14 of the past 15 months.
MAFs have rounded up a net of 
42, 980 crore since April 2023 when compared to just 14,033 crore in inflows into BAFs during a similar period.
42, 980 crore since April 2023 when compared to just 14,033 crore in inflows into BAFs during a similar period.
Since April 2023, MAFs’ assets under management (AUM) have increased more than threefold, reaching 83, 720 crore in June 2024.
83, 720 crore in June 2024.
In a similar period, the AUM of BAFs became by 41% to 2.7 trillion. April 2023 denoted a fresh start for MAFs as the adjustment of debt fund taxation constrained MFs to configuration new expense proficient resource distribution items to hold the debt streams.
2.7 trillion. April 2023 denoted a fresh start for MAFs as the adjustment of debt fund taxation constrained MFs to configuration new expense proficient resource distribution items to hold the debt streams.
MAFs arose as the most well-known and familiar choice for MFs as they gave the required adaptability, and most asset houses didn’t have an item in this classification, say industry chiefs.
Due to the promotion of the category, the MAF space has seen consecutive new fund offerings (NFOs) and has gained prominence.
Jiral Mehta, senior research analyst at FundsIndia says, “MAFs invest in at least three asset classes with a minimum allocation of 10 per cent in each. They offer a ready-made portfolio for investors who are looking for a one-stop solution. But if you have an existing portfolio, it might not fit well and could result in an unintended overweight/underweight position, which might reduce some asset allocation flexibility”.
Similarly, Bhavesh Jain, Co-head of factor investing at Edelweiss MF states, “Gold and silver have seen significant appreciation in their prices in recent months, making MAFs more attractive compared to BAFs”.
