As investors search for steady returns amid volatile markets, the Edelweiss Multi Asset Allocation Fund has positioned itself as a strong contender in the hybrid category. Designed for conservative investors, the open-ended scheme blends debt, equity arbitrage, and commodities to deliver consistent accrual income with equity-like tax efficiency.
Managed by Bhavesh Jain, Bharat Lahoti, and Rahul Dedhia, the fund maintains a 56% allocation to high-quality debt, 29% to equity arbitrage, and 13% to gold and silver arbitrage. The debt portion, entirely AAA-rated, includes Government of India bonds, NABARD, Aditya Birla Housing Finance, and SIDBI. With a yield to maturity (YTM) of 6.69% and an average duration of 2.59 years, it ensures stability and predictable returns.
The arbitrage strategy — earning about 7.4% from equities and 6% from commodities — generates steady income while neutralising market risk. Together, this structure delivers gross annualised returns of 7.2–7.5%, or around 6.2% post-tax, thanks to its equity-oriented taxation (LTCG @12.5%).
Edelweiss’s approach focuses on low volatility, steady accrual, and capital protection, positioning it between debt and equity savings funds on the risk-return curve. It’s particularly suited for conservative or retired investors who prioritise tax efficiency and diversification over high-risk growth.
Top performers vs Edelweiss Multi Asset Fund
While Edelweiss focuses on consistency, other multi-asset funds have taken more aggressive calls. According to data as of October 2025, the Quant Multi Asset Allocation Fund – Direct Plan dominates long-term performance, returning 21.97% (3 years) and 27.84% (5 years). Its tactical equity exposure and dynamic rebalancing strategy have helped it outperform peers in bullish phases.
In contrast, DSP Multi Asset Allocation Fund and Mahindra Manulife Multi Asset Allocation Fund lead in short-term performance, delivering 18.53% and 17.71% respectively over one year. Both funds benefited from a heavier equity tilt and exposure to outperforming sectors like technology and banking.
Meanwhile, Kotak Multi Asset Omni FoF and Nippon India Multi Asset Allocation Fund show consistent performance across all timeframes, balancing equity and fixed-income exposure effectively. Kotak’s six-month return of 16.27% and Nippon India’s strong three- and five-year showing reflect disciplined allocation and diversified exposure.
Edelweiss, by comparison, may not deliver double-digit short-term gains but offers low volatility, superior tax efficiency, and steady compounding — crucial for investors seeking preservation with moderate growth. Its fully hedged arbitrage strategy protects against downside risks, making it less sensitive to equity market swings than funds like Quant or DSP.
Investor takeaway
In a market where volatility and valuation risks persist, Edelweiss Multi Asset Allocation Fund provides a defensive yet rewarding choice, targeting 6–7% post-tax steady returns with minimal drawdowns. For investors seeking a blend of stability and growth, combining Quant for long-term alpha with Edelweiss or Kotak for predictable income could offer the best balance.
Disclaimer: Business Today provides market and personal news for informational purposes only and should not be construed as investment advice. All mutual fund investments are subject to market risks. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.