Amid Stock Market and Gold-Silver Volatility, This Mutual Fund Offers Over 20% Returns in 3 Years

Mumbai: Investors in gold and silver have faced a turbulent ride over the past year. Silver prices, which once delivered triple-digit returns, plunged by as much as 25% in a single trading session, leaving many investors reeling. Gold too has not been spared, falling nearly 10% over recent trading sessions. These precious metals, known for their volatility, have made direct investment risky, prompting experts to recommend diversified alternatives.

Multi-Asset Allocation Funds: A Balanced Solution

Financial analysts suggest that instead of directly investing in gold or silver, investors consider multi-asset allocation mutual funds. These funds invest across at least three different asset classes — such as equities, debt, and commodities, including precious metals like gold and silver. This diversification helps reduce risk while providing a more balanced portfolio.

According to SEBI guidelines, multi-asset allocation funds are required to invest a minimum of 10% in each asset class, though fund managers have the flexibility to adjust allocations based on market performance.

Strong Returns Despite Volatility

Among these funds, the Nippon India Multi-Asset Allocation Fund has stood out, delivering 23.97% over 1 year, 20.47% over 2 years, and 22.62% over 3 years. On average, the top 10 multi-asset allocation funds have delivered a 1-year return of 20.26% and a 3-year CAGR of 21.01%. In comparison, the top 10 equity funds posted a 1-year return of just 16.62%.

The performance of these funds has been bolstered by rising precious metal prices, which provided diversification benefits when equity markets were volatile and returns from debt instruments remained modest. Multi-asset allocation funds have even outperformed hybrid funds in recent years.

With gold and silver currently facing a decline, these funds continue to offer stability and steady returns across asset classes, making them a preferred choice for risk-conscious investors seeking balanced growth.