Multi-asset funds vs flexi-cap: 13.6% vs 11.9% over 3 years

Why compare these two

Flexi-cap funds are fully invested in equity, free to move across large, mid and small companies. Multi-asset allocation funds must hold at least three asset classes, typically equity, debt and gold. Over the last three years the multi-asset median did better on both return and risk. This post puts the numbers side by side with the other hybrids.

All figures are medians of direct-plan growth schemes as of 2 November 2026. Returns beyond one year are annualised.

What the table says

Multi-asset led on return and on fall. It beat flexi-cap by 1.7 points a year over three years and 2.8 points over five, and its median worst fall was 10.5% against 18.5%, eight points shallower. Its volatility of 10.1% was also nearly 30% lower than flexi-cap's 14.3%.

It was the only category here with a double-digit five-year median (12.2%). It also had a positive one-year median (2.3%); equity savings did too (2.9%), but with a lower multi-year return.

Balanced advantage's fall was as shallow as multi-asset's. At −9.5% its worst fall is a point smaller than multi-asset's, but its three-year return is 4.2 points lower.

Return per unit of fall

Dividing three-year return by the worst three-year fall gives an illustrative ratio (our own, not a standard measure):

Equity savings tops this table only because its fall was tiny (−4.8%); its absolute return is the lowest. Among the fuller-return categories, multi-asset's ratio is double flexi-cap's.

One reason to be careful: the gold effect

Multi-asset funds hold gold and often silver, and these metals rose a lot over the same window. In our price series gold went from ₹5,350.78 a gram on 3 November 2023 to ₹11,925.86 on 2 November 2026, +122.9%. Silver went from ₹62.10 to ₹153.39, +147.0%. A fund with even a modest slice in these metals picked up a boost that flexi-cap funds did not have.

That also means the three-year edge is partly a story about one asset class. Gold and silver have since fallen from their January peaks, 24.2% and 54.7% respectively, which is covered in gold and silver below their January peaks. The one-year multi-asset median of 2.3% already carries part of that fall. A different three-year window would not necessarily produce the same ordering.

For how these funds hold gold and silver, see gold and silver in multi-asset funds.

What to take from it

1. Mixing asset classes narrowed the falls. All four hybrid categories had shallower worst falls than fully invested flexi-cap (−18.5%), as one would expect.
2. The return side depended on which assets did well. That is the nature of a mix: a diversifier helps when it rises while equity lags, and holds back when it does not.
3. Medians are not funds. Within multi-asset, equity share and gold share vary a lot. Check what a particular fund holds before using a category figure.

For the same idea in a worked example, diversification arithmetic shows how two assets with the same average return can smooth a ride. Browse and filter hybrid funds on the screener.

Medians of direct-plan growth schemes with computed history, as of 2 November 2026; metal prices from our daily rupee series. Past performance does not indicate future results.