Recent months have seen significant market volatility due to foreign fund withdrawals, fluctuations in crude oil prices, geopolitical tensions, and inconsistent corporate earnings. In such circumstances, investors are seeking strategies that provide a balance between growth and stability. Flexi cap funds and multi asset allocation funds are becoming popular for their ability to diversify and adapt, aiding investors in managing uncertainty. Sailesh Jain, Fund Manager at Tata Asset Management, noted, “Current market volatility, influenced by changing global indicators and sector valuation disparities, necessitates investment strategies that merge flexibility with diversification.
Flexi cap funds achieve this through dynamic asset allocation across large, mid, and small caps, while multi asset allocation funds aim to bolster resilience by diversifying across equities, fixed income, gold, and commodities.” According to AMFI data, net inflows into flexi cap funds surged in 2025 (up to August), reaching ₹46,867 crore, a significant increase from ₹22,751.3 crore in the same timeframe the previous year, while multi asset allocation funds attracted ₹23,989.3 crore, the second-highest in hybrid categories. Consistent with industry trends, Tata Flexi Cap Fund and Tata Multi Asset Allocation Fund have also experienced growth, with average assets under management (AUM) rising by 12.5% and 27% year-on-year to ₹3,385 crore and ₹4,040 crore, respectively, as of August 31, 2025.
Tata Flexi Cap Fund attracted ₹456 crore in inflows in 2025, double that of last year, with Hyderabad accounting for a 74% increase in investments to ₹7.39 crore. Jain remarked, “Flexi cap and multi asset funds provide investors with an intelligent asset allocation framework, enabling portfolios to remain agile, seize opportunities, and endure market fluctuations. The increased investment activity from Hyderabad demonstrates a growing confidence in these diversified strategies.” Flexi cap funds allow managers to pivot towards large caps during uncertain times for stability, while shifting to mid- and small-caps when the potential for higher returns is deemed to surpass the risks.
Multi asset allocation funds add an additional protective layer by balancing across asset classes, helping to shield portfolios from abrupt market downturns.