Multi-asset funds steal the show in 2025 as metals rally brings windfall gains

Mumbai: Multi-asset allocation funds emerged as the standout performers in 2025, powered by the sharp rally in precious metals that overshadowed returns from the equity market. Gold prices surged 76% during the year, while silver soared an astonishing 155%, giving funds with diversified exposure a decisive edge.

Data from Value Research showed that multi-asset allocation funds delivered an average return of nearly 17%, ahead of equity-oriented categories. These funds benefited from their allocation to gold and silver, cushioning portfolios against the drag from equities.

Equity fund categories, meanwhile, witnessed mixed performances but struggled to beat their respective benchmarks in 2025. Large-cap funds delivered an average return of 7.42%, trailing the BSE 100 Total Returns Index (TRI)'s 9%. Midcap funds managed just 2.61% against the BSE 150 Midcap TRI's 3.2%, while small-cap funds lost 5.2% on average. The BSE 250 Smallcap TRI fell 5.6%. Other diversified segments such as flexicap and multicap also fell short of their benchmarks, highlighting that active equity strategies broadly failed to keep pace with index performance.


Balanced advantage funds, another hybrid category that adjusts bets between equity and debt based on market conditions, managed a relatively modest 5.9% average return.