Best Multi-Asset Allocation Funds in India: Top 5-Year Performers with Low Expense Ratios

Multi-asset allocation funds have emerged as one of the fastest-growing Mutual Fund categories in India, driven by investors seeking diversification across multiple asset classes through a single investment. According to the Association of Mutual Funds in India (AMFI), inflows into the category jumped from Rs 48,635 crore in November 2023 to Rs 1,01,688 crore in November 2024, a rise of 109.10 per cent, before surging further to Rs 1,57,267 crore by November 2025, reflecting a cumulative increase of 223.40 per cent over two years. The momentum has continued into 2026, with the category recording net inflows of Rs 4,810 crore in June 2026, making it the second-largest contributor to Hybrid Fund inflows for the month. Notably, multi-asset allocation funds have now witnessed positive inflows for 55 consecutive months, underlining the structural and sustained investor appetite for the category. As of January 31, 2026, the assets under management (AUM) of multi-asset allocation funds stood at Rs 1.74 lakh crore, up from Rs 25,934 crore in January 2023, reflecting AUM growth of 573.50 per cent over three years.

Under SEBI regulations, multi-asset allocation funds are required to invest at least 10 per cent each in a minimum of three asset classes, typically equity, debt, and gold. This diversified asset allocation aims to reduce portfolio volatility while providing long-term wealth creation opportunities.

Five-Year Performance of Multi-Asset Allocation Funds

Among the schemes currently available, only eight multi-asset allocation funds have completed a five-year track record, making them suitable for evaluating long-term performance consistency.

The category average five-year CAGR stands at 13.9 per cent.

Which Multi-Asset Allocation Fund Offers the Best Balance of Returns and Costs?

While the Quant Multi Asset Allocation Fund delivered the highest five-year CAGR of 18.93 per cent, it also carries a relatively higher Total Expense Ratio (TER) of 1.55 per cent.

Among funds with at least a five-year history, the ICICI Prudential Multi Asset Fund offers one of the strongest combinations of long-term performance and cost efficiency. The scheme generated a 17.11 per cent five-year CAGR, the second-highest in the category, while maintaining the lowest regular plan TER of 1.06 per cent. It is also the largest scheme in the category with an Assets Under Management (AUM) of Rs 84,991 crore, reflecting strong investor confidence and economies of scale.

The Nippon India Multi Asset Allocation Fund has delivered an impressive 18.33 per cent CAGR since inception, demonstrating strong long-term wealth creation. However, based on the five-year performance and expense ratio combination, ICICI Prudential continues to stand out.

For investors seeking a combination of relatively lower costs and stable long-term performance, ICICI Prudential Multi Asset Fund remains a strong choice. Meanwhile, the SBI Multi Asset Allocation Fund offers another competitive alternative, supported by a 1.46 per cent TER, 15.82 per cent three-year CAGR, and the second-largest AUM in the category at Rs 19,354 crore. 
Also Read - Rajputana Biodiesel Share Price Jumps 12% On Thursday; Here’s Why

Note: The above returns are based on the Regular Plan – Growth Option. Investors may also consider Direct Plans, which generally have lower expense ratios. Past performance does not guarantee future returns. Investors should read all scheme-related documents carefully before making any investment decisions.

Disclaimer: The article is for informational purposes only and not investment advice.