Multi-Asset and Aggressive Hybrid Fund

The beginning of 2026 has been a bit difficult for stock market investors. There has been sharp ups and downs in the market and there was considerable selling after the Union Budget. Nifty 50 and Sensex have fallen, while the fall in mid and small cap stocks was more due to increase in Securities Transaction Tax (STT) on F&O. The market is still volatile and gold is in the news again, hence many investors are confused about investing all their money in equities. In this environment, mutual fund options like multi-asset allocation and aggressive hybrid are considered more balanced and safe.

Which fund is right for you in 2026?

Multi-asset allocation funds invest simultaneously in equity, debt and gold (sometimes silver or other assets). Their objective is to distribute the risk instead of relying on a single asset. If we look at the recent performance, this category has surprised investors. Multi-asset funds have given an average return of 19.42% in the last 1 year. CAGR of 3 years has been around 18.55% and CAGR of 5 years has been around 15.70%. These returns exceed inflation and are better than many traditional fixed income options.

According to AMFI data, in December 2025, investment of about Rs 7,426 crore came in this category and the total AUM increased to Rs 1.65 lakh crore. There was a net inflow of more than Rs 47,000 crore in the entire 2025. The main reason for this was the good performance of gold and silver, which supported the falling market.

Aggressive Hybrid Fund: Choice for growth seekers

In aggressive hybrid funds, up to 6580% is invested in equity, the remaining money is invested in debt. That means these funds are very close to equity, but do not completely depend on the stock market. However, their performance in the last one year was a bit weak and the average return was only 7.28%. But the picture looks better in the long term. Their CAGR in 3 years has been 14.79% and in 5 years it has been around 12.89%.

In December 2025, there was a net inflow of Rs 1,514 crore in this category and the total AUM was around Rs 2.53 lakh crore. However, investment in the hybrid fund segment has decreased month-on-month, which shows the caution of investors.

Where is the difference in 2026?

The real difference in 2026 depends on your risk appetite and investment objectives. If you want a less volatile, self-balancing portfolio and want to take advantage of an asset like gold, multi-asset funds provide more comfort. But if you want better growth in the long term and can tolerate market fluctuations, then aggressive hybrid funds may be better for you. This decision is even more important for SIP investors. SIPs in multi-asset funds reduce the impact of fluctuations, whereas SIPs in aggressive hybrid funds can create more wealth in the long run provided you are patient. No single fund is perfect for everyone in 2026. The right fund is the one which matches your thinking, risk appetite and investment goals.