Union Multi Asset Allocation Fund: Stability in volatile market

Current market scenario

Market has been volatile due to surging crude oil prices and geo-political uncertainties. Crude oil prices has surged to $100 per barrel stoking inflation concerns. Global bond yields have surged causing turmoil in financial markets. Gold prices on the other hand, surged by 9% in August and 16.8% on a YTD basis (as on 31^st August 2025, source: MCX). In current market conditions a multi asset allocation strategy may provide stability to investors’ portfolios.

Why multi-asset allocation fund?

• Winner rotate across classes: Recency bias attracts investors to asset classes that are currently outperforming. However, historical data shows that winners have rotated across asset classes. In the last 15 years, equity was the top performer in 6 years, debt was in the top performer in 2 years, and gold was the top performer in 7 years.
  
  

  

  Source: NSE, Advisorkhoj Research, as on 31^st August 2026. 2026 YTD returns are absolute returns. Equity is represented by Nifty 50 TRI, Debt by Nifty 10 year Benchmark G-Sec Index and Gold by MCX spot prices.



• Gold and equity are often counter cyclical: Traditional asset allocation models rebalance between debt and equity. However, multi asset allocation has the potential of increasing performance consistency of your portfolio since gold and equity are counter-cyclical i.e. gold tends to outperform when equity underperforms and vice versa (see the chart below).
  
  

  

  Source: Advisorkhoj Research, as on 31^st August 2026



• No tax event for investor during portfolio rebalancing: If you were rebalancing your portfolio between equity and debt funds, tax events may be triggered due to potential capital gains when you redeemed and reinvested. Multi asset allocation fund provides the benefit of automatic rebalancing with no tax event for the investor.
  
  

  In this article we will review Union Multi Asset Allocation Fund. The fund was launched in September 2024 and has outperformed the equity broad market index Nifty 50 TRI (see the chart below).

  

  Source: Advisorkhoj Research, as on 31^st August 2026. Data is for Union Multi Asset Allocation Fund - Regular Plan, Growth Option

Consistently in upper quartiles

Union Multi Asset Fund has consistently been the top 2 quartiles in 5 out of 7 completed quarters since its inception (please see the table below).

Source: Advisorkhoj Quarterly Returns Quartile Ranking, as on 30^th June 2026

Limited downside risk for investors

The chart below shows the drawdown of Union Multi Asset Allocation Fund versus Nifty 50 TRI since the inception of the scheme. You can see that during this volatile period for equity market Union Multi Asset Allocation Fund was able to limit downside risks and provide stability to investor’s portfolios.

Source: Advisorkhoj Research, as on 31^st August 2026

Asset Allocation

Source: Union MF

Investment strategy

Equity

• Top down - The top down approach shall involve analysis of the macro-economic factors, industry evaluation, benchmark industry allocation, market outlook etc. It shall be used to determine the asset allocation.


• Bottom up - Bottom up approach to help identifying individual companies to create a portfolio of carefully selected stocks, offering attractive potential growth opportunities.

Fixed Income

• Selection of debt securities will be guided by credit quality, liquidity, interest rates and their outlook.


• Duration to be managed dynamically based on the fund manager’s view and guidance by the market

Commodity ETFs

• Investments in units of Gold and / or Silver ETFs to provide risk diversification from Equity and Debt. This will be regularly tracked and rebalanced.

REITs / INVITs

• The Fund Manager has the discretion to invest in units of REITs and InvITs as and when favourable opportunity is present.

Taxation

Since Union Multi Asset Allocation Fund has minimum 65% allocation of equity (including hedging), the fund enjoys equity taxation. Short term capital gains (holding period of less than 12 months) are taxed at 20%. Long term capital gains (holding period of more than 12 months) of up to Rs 1.25 lakhs are tax exempt and taxed at 12.5% thereafter.

Current portfolio positioning

Source: Union MF, as on 31^st July 2026

Who can find Union Multi Asset Allocation Fund suitable?

• Investors seeking stability and reasonable returns across different market conditions


• Investors who want to diversify across three or more asset classes in a single fund


• Investors who want to add gold to their asset allocation


• Investors with medium to long term investment horizons, 3 - 5 years plus

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