Kotak Multi Asset Allocation: Top performing fund for getting exposure to multiple asset classes in uncertain market conditions

The market has been volatile since the start of the year. Uncertainty about tariffs, geo-political tensions, escalating global trade conflicts, depreciating INR and continuing FII sell offs (Rs 27,000 crores on month to date basis, as on 16^th January 2026, source: NSDL). have been headwinds for the equity market. Rising US Treasury bond yields and State Governments’ borrowings are putting pressure on bond prices. On the other hand, precious metals are witnessing an unprecedented rally, shattering records (see the chart below) and showing no signs of slowing down. In current market conditions, multi asset allocation funds which provides exposure to three or more asset classes can provide stability to your portfolio. In this article, we will review Kotak Multi Asset Allocation, a top performing fund in the multi-asset allocation funds category.

Source: MCX spot prices, Advisorkhoj Research, as on 27^th January 2026

Why invest in multi asset allocation funds?

• Winners rotate across asset classes: The chart below shows the calendar year returns of different asset classes over the last 15 years. You can see that equity outperformed gold 7 times and gold outperformed equity 8 times in the last 15 years. A multi asset allocation strategy will provide stability to your investment portfolio.
  
  

  

  Source: MCX spot prices, NSE, Advisorkhoj Research, as on 31^st December 2025. Equity is represented by Nifty 50 TRI, debt by Nifty 10 year Benchmark G-Sec Index, Gold and Silver by MCX spot prices of respective commodities



• Improve portfolio risk return trade-off: The charts below shows the median and standard deviation of 1 year rolling returns for different tenures over the last 20 years. You can see that a mix of different asset classes can improve risk / return trade-off in portfolios.
  
  

  

  Source: MCX spot prices, NSE, Advisorkhoj Research, as on 31^st December 2025

Outperformed broad market index

Kotak Multi Asset Allocation Fund has outperformed the broad market index, Nifty 50 TRI since the inception of the scheme (see the chart below).

Source: MCX spot prices, Advisorkhoj Research, as on 31^st December 2025

Limited downside risks

Despite outperforming gold, Kotak Multi Asset Allocation Fund limited downside risks for investors in market corrections (see the chart below).

Source: NSE, Advisorkhoj Research, as on 16^th January 2025

Outperformed peer average across market conditions

The chart below shows the 1 year rolling returns of Kotak Multi Asset Allocation funds versus the category average returns since the inception of the scheme. You can see that the fund consistently outperformed the peer average, except for a brief period.

Source: NSE, Advisorkhoj Research, as on 16^th January 2025

Consistently in upper quartiles

Kotak Multi Asset Allocation has consistently in the top 2 quartiles in 8 out of last 10 quarters. The fund has been the top quartile for last 2 consecutive quarters.

Source: Advisorkhoj Research, as on 31^st December 2025

Current portfolio positioning

• Equity (65 - 80% including arbitrage): The investment focus is on stocks with a high earnings visibility going ahead. There are select pockets across industries where the earnings growth is pretty robust, and the market is rewarding those.


• Fixed Income (10 - 25%): The fund maintains the duration in the range of 5-7 years.


• Commodities ETFs / ETCDs (10 - 25%): The fund is currently overweight on silver relative to gold in our allocation strategy, anticipating that forthcoming catalysts will Favor silver's performance. This preference is driven by silver's unique dual role as both a safe-haven asset and a vital industrial metal, combined with ongoing supply constraints and a projected market deficit for the fifth consecutive year.


• Arbitrage: In months, when the arbitrage opportunities provide better returns than the debt papers, the fund deploys more assets into arbitrage trades. The benefit is that in months when the arbitrage returns are sub optimal, the fund deploys a lower amount in arbitrage and still maintain the 'equity' taxation status.
  
  

  

  Source: Kotak MF, Advisorkhoj Research, as on 31^st December 2025

Why invest in Kotak Multi Asset Allocation Fund?

• Multi asset diversification with exposure to equities, debt and commodities helping balance growth potential and stability


• Lower volatility compared to pure equity funds as different asset classes react differently during market ups and downs


• Actively managed by specialists across equity, debt and commodities ensuring research driven asset and security selection


• Suitable for long term investors seeking wealth creation with relatively smoother return patterns


• One stop investment option for investors who want diversified asset allocation without managing multiple schemes

Who can find Kotak Multi Asset Allocation Fund suitable?

• Investors looking for capital appreciation over long investment horizons


• Investors who want to reduce portfolio volatility by diversifying across multiple asset classes


• Investors with minimum 3 - 5 years investment tenure


• Investors with moderately high to high risk appetites


• You can invest either in lump sum or SIP based on your investment needs

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