Bandhan Multi Asset Allocation Fund: Multi Asset Allocation strategy for uncertain markets

Current market context

Volatility returned to market after Trump Administration imposed 50% tariff on India's exports. Talks between President Trump and President Putin on the Ukraine War remained inconclusive. There is uncertainty about the impact of tariffs on India's exports, even as the Government is trying to negotiate bilateral trade agreements with other countries. In an environment of economic uncertainty, a multi asset allocation strategy can bring stability to your investment portfolio.

What are multi asset allocation funds?

Multi Asset Allocation funds are hybrid mutual fund schemes which invest in 3 or more asset classes. According to SEBI regulations multi asset allocation funds must invest minimum 10% each in at least 3 asset classes. Apart from the two most popular asset classes, debt and equity, these schemes invest in asset classes like gold, silver, international securities, real estate investment trusts (REIT), infrastructure investment trusts (InvITs) etc.

Why invest in Multi Asset Allocation Funds?

• Difficult to time the markets
  
  

  The chart below shows the calendar year returns from Nifty 50 in each year over the last 25 years. You will see that the Nifty 50 has given varying returns and even negative returns in various years. Most investors rely on past performance to make investment decisions. Often, they pursue assets that have performed well in the past. In doing so, they sell depreciated holdings to buy potentially overpriced investments, thus ending up with sub-optimal returns. Studies* have shown that an investor's effort to outguess the market by jumping between asset classes results in underperformance. (Source: Bandhan MF. Data from 31^st Dec 2010 to 31^st June 2025. Each strategy considers the following four asset classes: Domestic equities, International equities, Fixed Income,and Gold. *Dalbar study.) Timing the equity markets is difficult. It is difficult to predict the correct entry and exit points consistently in the short term.

  
  

  

  Source: NSE, Advisorkhoj Research, as on 12^th August 2025.



• Asset classes have low/negative correlation: Different asset classes have low or even negative correlation of returns in different investment cycles (see the chart below). Diversifying your investment across asset class will bring stability to your portfolio and improve consistency i.e. if one asset class underperforms, the outperformance of another asset class will balance the risks.
  
  

  

  Source: Advisorkhoj Research, NSE, MCX. Equity is represented by Nifty 50 TRI, Fixed Income by Nifty 10-year Benchmark G-Sec Index, Gold by MCX spot prices. As on 31^st July 2025



• Historical data shows that gold as an asset class outperforms equity in times of market downturns. Multi asset allocation can provide richer diversification to your investment portfolio.
  
  

  

  Source: Advisorkhoj Research, NSE, MCX. Equity is represented by Nifty 50 TRI, Gold by MCX spot prices. As on 31^st July 2025

Why is investing in Multi Asset fund desirable now?

The Indian market has been volatile this year due to rapid geopolitical developments. Current market conditions where interest rates are falling, precious metals are at record highs and there is uncertainty about global macro-economic outlook, etc. can leave investors confused. Despite all the volatile situations, India continues to be one of the fastest growing economies in the world. Lower inflation and fiscal consolidation are likely to be favourable for long term debt exposure. AAA and AA corporate bond spreads are stable, providing a chance to earn incremental returns over G-Secs, without excessive credit risk. The uncertain geopolitical scenario is driving the demand for precious metals as safe haven investments. Not only this, the commercial appeal of Silver in the green energy space is likely to provide tailwinds. In such situations, investors can minimise their susceptibility to volatility through diversification across various asset classes.

About Bandhan Multi Asset Allocation Fund

The fund was launched in January 2024. Bandhan Multi Asset Allocation Fund invests in domestic equities, international equities, fixed income / debt, commodities (gold and silver) and arbitrage (see the graphic). The asset allocation of the scheme will ensure equity taxation. The fund is managed by fund managers Mr. Viraj Kulkarni, Mr. Daylynn Pinto and Mr. Kapil Kankonkar (w.e.f. 16^th June 2025). (for equity portion), and Mr. Gautam Kaul manages the Debt portion of the fund.

Outperformed the broad market index

The chart below shows the growth of Rs 10,000 investment in Bandhan Multi Asset Allocation Fund versus the broad market index, Nifty 500 TRI. You can see that the fund has outperformed the broad market index.

Source: Advisorkhoj Research as on 31^st August 2025

Limited downside risks for investors

The chart below shows the drawdowns Bandhan Multi Asset Allocation Fund versus the broad market index Nifty 500 TRI. You can see that the fund was able to limit downside risks for investors.

Source: Advisorkhoj Research as on 31^st August 2025

Rolling Returns and Volatility

Although the timeframe is short, the fund's rolling returns, and volatility are close to the average observed during the model's performance period which is shown in the table below:

Data Source: Bandhan MF, Advisorkhoj Research on Actual Fund performance from 31-Jan-24 till 31-Aug-25.

Portfolio Construct

Broad Asset Allocation

• Based on the long-term return expectation of each asset class


• Takes a long-term view; hence infrequent changes


• Follows strategic asset allocation that is backed by research*

Sub Asset Allocation

• Based on the fund manager's outlook


• Looks to capitalize on short-term opportunities
  
  

  

Asset Allocation

The chart below shows the monthly asset allocation of the fund since its inception. You can see that the fund has maintained asset allocations in a fairly tight range.

Source: Bandhan MF: Data as on 31^st July 2025

The chart below shows the actual average monthly asset allocation of the fund versus the target asset allocation set during the NFO. The additional 1% to 2% allocation in arbitrage / debt serves as a buffer maintained by the fund manager for equity taxation and cash management.

Source: Bandhan MF: Data from 31^st January 2024 to 31^st July 2025

Why invest in Bandhan Multi Asset Allocation Fund?

• Disciplined investment approach with no personal biases can bring consistency in performance over sufficiently long investment horizons


• Diversification across 5 asset classes, with different risk / return profiles


• Potential of generating superior risk adjusted returns


• Benefits of equity taxation

Who should invest in Bandhan Multi Asset Allocation Fund?

• Investors looking for a long-term strategic allocation to different asset classes


• Investors looking for relatively stable returns with low downside risks


• Investors with moderate to high risk appetites


• Investors with long investment tenures. We recommend minimum 3 years investment tenures for this scheme.

Investors should consult with their financial advisors or mutual fund distributors if Bandhan Multi Asset Allocation Fund is suitable for their investment needs.