Multi asset allocation funds at a category level delivered a handsome 20% return in 2025, pulling up their 3 yr CAGR to an impressive 18%.
Vinod says that while 2025 was all about returns, 2026 for MAAFs is going to be all about risk management – given that equity market is going through a challenging phase, precious metals are in a sideways move and debt is now all about accruals with little scope for capital gains.
The category aims to deliver an FD+2% kind of return inthe long run. Last year saw returns double this level and more. This year, investors should be happy if MAAFs deliver FD+2%.
This dual role of delivering healthy returns on one hand while managing risks on the other hand is where multi asset omni FoFs – like the one Vinod manages at ABSL – come in handy, due to their wide mandates and ability to move nimbly in response to market dynamics.
The mandate allows the fund manager to move between 10-80% in equity, 10-80% in fixed income and 10-50% in commodities, with underlying assets being funds in each of these categories.
ABSL’s multi asset omni FoF is currently 60% invested in equity, 20% in debt and 20% in precious metals.
Within its equity allocation, Vinod employs a core and satellite strategy. The core comprises ABSL’s flexicap, multicap and large cap funds while satellite can include other cap sized funds as well as sectoral and thematic funds from ABSL.
Some of the calls that Vinod took in the last 18 months, which have helped the fund deliver healthy returns include:
- Reducing exposure in the midcap fund, exiting the small cap fund and increasing exposure to the large cap and flexicap funds
- Moving out from value oriented funds in Aug24 (Value, Dividend Yield, Infra funds) and moving into growth oriented funds (Digital India, Banking, Consumption)
- Maintaining 13% exposure to gold over last 18 months and introducing a meaningful exposure to silver in Nov 2025.
He acknowledges that holding onto the Digital India Fundover the last 3 months has been a drag on performance but intends holding the position as IT services is now a contra buy call at the fund house.