In an increasingly uncertain world, the best recourse for fund managers and asset allocators is stick to your framework and process and adopt a medium term outlook.
The core framework that underpins asset allocation decisions in HDFC Multi Asset Active FoF is counter-cyclicality and avoidance of chasing momentum.
This counter-cyclical focus resulted in the fund increasing equity exposure from 40% in early 2026 to 57% by May 2026.
The momentum shunning focus saw the fund trim its gold positions from 15% to 11% when momentum was very high – and the fund continues to keep it at this level at present.
The fund’s SID does not provide for allocations to silver ETFs/funds. Precious metals allocation is restricted only to gold.
Within equity, the most significant allocation shift in last 12-15 months has been doubling the small cap exposure from 6% to 13% -first round in March 2025 and second in March 2026.
Overall mid and small cap exposure (including exposures to these segments in non-segment based funds also) now stands at about 35% in what was earlier a large cap focused allocation.
Equity allocation is managed with a core and satellite framework – core being cap based funds and satellite being sectoral and thematic funds.
In recent months, the fund has added satellite exposures in banking and consumer sector funds.
Speaking on performance, Srinivasan observed that this is perhaps the only category in MFs which does not have a uniform benchmark. Different AMCs have significantly different multi asset strategies and have benchmarks that best suit their particular strategies. As a result, benchmark returns within the category for the last 1 year range from 5% to 25%.
HDFC Multi Asset Active FoF for example has beaten its benchmark consistently – yet finds itself on a 1 yr basis in the 4thquartile when all multi asset funds are clubbed into one category by independent information providers. Not having allocation to silver has been a key reason for this divergence in performance evaluation of the fund.
Srinivasan believes disparities in 1 yr performance due to differences in strategies tend to even out over 3-5 year cycles – which is the time horizon he recommends anyway for investors to consider when allocating to multi asset funds.