Investment & Financial Planning

Multi-Asset Allocation Funds for NRIs- A Diversified Investment Choice

autohr img By Pankaj Shaw | Last Updated : 09 Dec, 2025

Multi-Asset Allocation Funds for NRIs
Table of Contents

Multi-asset allocation funds offer investors a single investment that further combines equities, debt, and one additional asset class, such as gold, real estate, and so on. Considering this, multi-asset allocation funds for NRIs, residents, and businesses are investment options that, with risk management, balance growth potential and increase wealth in India.

Confused? In this blog, you will get to know about multi-asset allocation funds and why they are classified as a diversified choice for NRIs. So, read on and gather all the information.

Key Takeaways
  • In simple words, multi-asset allocation funds are a type of mutual fund that invests in a combination of different asset classes such as equities, debt, gold, and other commodities.
  • The goal of the multi-asset allocation funds is to increase the potential returns while managing the risks.
  • Instead of managing different funds separately, multi-asset allocation funds offer diversified exposure in one product. This further balances risk across gold, equity, and debt.
  • In response to market conditions, fund managers adjust the allocation of assets, enabling tactical shifts without the need for investor intervention.
  • Asset classes generally move differently. For instance, when the value of equity falls, gold or debt stabilizes the portfolio. 

What Are Multi-Asset Allocation Funds?

A multi-asset allocation fund, in simple terms, is a type of mutual funds that invest your money in a diversified mix of asset classes. It generally includes debt (bonds), equity (stocks), and commodities like gold.

However, unlike traditional mutual funds that concentrate on one investment category, multi-asset allocation funds make your investment in three or more different assets. This, further, through diversification, reduces the risk while still offering growth potential. Here is how the multi-asset allocation funds work:

Multi-Asset Allocation Funds

  • Equity (stocks): 40-70%- for long-term growth
  • Debt (bonds): 20-40%- for income and stability
  • Gold/ commodities: 10-20%- as a hedge against market downturns and inflation

Additionally, during the economic shifts, each asset class responds differently. Considering this, based on the market conditions, the fund managers allocate assets to investors. For instance, during periods of volatility, fund managers shift to gold and debt rather than equity.

So, this was all about multi-asset allocation funds. Moving ahead, let's discuss why these investment options are suitable for NRIs.

Why Multi-Asset Allocation Funds Are Suitable for NRIs?

Multi-asset allocation funds are suitable for NRIs because they provide the option to invest across different assets such as debt, equity, and gold. It provides a balanced approach to NRIs that further helps them manage risk while focusing on steady returns. According to SEBI, it is mandatory to invest at least 10% of the minimum funds in three asset classes.

Here is what multi-asset allocation funds for NRIs mean for you: for investing in debt funds, equity, and gold ETFs, you do not need to open a separate bank account. Additionally, you get all three assets in one fund, with each of them with own rebalancing needs and tax treatment. For NRIs who are with controlled risk looking for a long-term stable income, these funds provide a smooth market volatility.

Another benefit that NRIs get from investing in multi-asset allocation funds is professional management. The fund manager constantly tracks the market conditions and, as needed, adjusts the asset mix. This saves NRIs from the hassle of making an active decision. Additionally, through NRE or NRO accounts, while living overseas, NRIs can easily access these investments. It makes the investment process fully compliant and simple with Indian regulations.

In simple terms, you can say that investing in multi-asset allocation funds provides NRIs with meaningful exposure to the growth of India without giving time to the market or rebalancing the portfolios manually. All in one place- these funds offer diversification, convenience, and stability to investors.

So, here is why multi-asset allocation funds are a suitable investment choice for NRIs. Moving further to the next section, let's look at the top 10 multi-asset allocation funds for NRIs.

Top 10 Multi-Asset Allocation Funds for NRIs

Here, the table below showcases the top 10 multi-asset allocation funds for NRIs in India based on consistency, AUM, and performance:

Sr. No. Multi-Asset Allocation Fund (Direct Growth) Asset Under Management (in Crore) 3-Year CAGR 5-Year CAGR Expense Ratio (%)
1. Nippon India Multi-Asset Omni FoF Fund INR 1,477 20.2% NA 0.13
2. Nippon India Multi Asset Active FoF Fund INR 907 20.0% NA -
3. ICICI Prudential Multi Asset Fund INR 71,900 19.8% 23.9% 0.67
4. Nippon India Multi Asset Allocation Fund INR 8,722 20.8% 18.9% 0.27
5. Kotak Multi Asset Allocator FoF- Dynamic Fund INR 1,857 18.8% 20.3% -
6. SBI Multi Asset Allocation Fund INR 11,306 18.2% 15.9% 0.59
7. HDFC Multi-Asset Active FoF Fund INR 5,036 16.8% NA 0.07
8. HDFC Multi Asset Fund INR 5,149 15.4% 16.1% 0.8
9. ICICI Prudential Asset Allocator Fund INR 28,586 15.4% 15.6% 0.2
10. Franklin India Income Plus Arbitrage Active FoF Fund INR 87 14.1% 15.3% 0.24

These were the top 10 multi-asset allocation funds for NRI. Moving ahead, now let's know how these funds actually work.

How Multi-Asset Allocation Funds Work?

As mentioned at the beginning of the blog, to manage risk, multi-asset allocation funds invest in different asset classes. Based on market trends and economic conditions, fund managers constantly monitor and adjust asset allocations. Further, this approach helps investors looking for growth and stability when investing in these hybrid multi-asset funds.

Additionally, diversification helps in reducing the effect of volatility. SEBI has made it mandatory that at least 10% of the investment in multi-asset funds be made in three asset classes. Apart from this, investors receiving benefits from a portfolio managed by professionals provide a different combination of asset classes. It also eliminates the requirement for individual investment research.

Further, the multi-asset allocation funds aim to combine the fixed-income stability, growth potential of equities, and hedging benefits of gold. This further improves the experience of investment and minimizes return volatility. Investing in these funds provides you with an equal balance between your returns and risk.

This is how multi-asset allocation funds work. Moving further, let's look at the taxation of multi-asset funds for NRIs.

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Taxation of Multi-Asset Funds for NRIs

In India, the taxation rules for multi-asset allocation funds are based on their average equity exposure. Amendments to the 2020 Budget state that, based on the classification of funds, investors are taxed.

The recent changes in the multi-asset allocation funds indicate that funds with more than 65% equity exposure are taxed according to equity. Further, with lower exposure of 65% are taxed like debt funds.

Considering this, the taxation on equity funds is done on two bases: short-term and long-term capital gains.

  • Short-Term Capital Gains (STCG): The funds that are held for less than 12 months are known as short-term capital gains. These gains are taxed at 20%.
  • Long-Term Capital Gains (LTCG): The funds held for more than 12 months are known as long-term capital gains. If the capital gain is less than INR 1,25,000, no tax is imposed on it. However, if they are more than that, a 12.5% tax is imposed on the gain without indexation benefit.
Capital Gains Tax on Multi-Asset Allocation Funds Holding Period Old Tax Rate New Tax Rate
Short-Term Capital Gains (STCG) Less than a year 15% 20%
Long-Term Capital Gains (LTCG) More than a year 10% 12.50%

Further, let's know the taxation on debt mutual funds.

Capital Gains Tax on Multi-Asset Allocation Funds Description
Short-Term Capital Gains (STCG) If you sell the debt funds within three years, tax will be imposed as per your income tax slab rate in India.
Long-Term Capital Gains (LTCG) For debt funds held for more than 3 years, 12.5% is the flat tax rate without indexation benefit.

Here, the removal of indexation funds for debt funds states that the whole capital gain received from selling the funds after three years will be taxed at a 12.5% flat rate.

Now, let's know the TDS for NRIs on multi-asset allocation for funds.

  • For Equity-Oriented (>=65%): 20% on short-term capital gains, 12.5% on long-term capital gains more than INR 1,25,000.
  • For Debt-Oriented (/<65%): 30% flat on all capital gains regardless of the holding period.

This is how multi-asset allocation funds are taxed in India. Moving ahead, let's know how NRIs can invest in these funds.

How NRIs Can Invest in These Funds?

Here is the step-by-step process to invest in multi-asset funds for NRIs:

Steps to invest in multi-asset funds for NRIs

Step 1: Open an NRE or NRO Account

NRIs can invest in multi-asset allocation funds on a repatriable or non-repatriable basis. Considering this, if you opt for an NRE account, all your investments are fully repatriable.

  • NRE Account: An NRE account is a suitable option for investing in foreign earnings. In this principal amount and returns are fully repartiable. Additionally, with this account, you can send funds overseas at any time.
  • NRO Account: This account is a good option for investing in Indian income (dividends, rent). In this account, repatriation of funds is limited to $1 million per financial year.

Step 2: Complete Your KYC

Once your residential status changes to NRI, you need to complete a new know your customer (KYC) process with updated documentation. The papers should reflect your NRI status. For this, you need to submit the following documents:

  • Self-attested copy of passport
  • Recent passport-size colored photograph
  • Overseas address proof (bank statement, utility bill)
  • Visa or OCI card
  • PAN card (if you don't have apply for it first)

Further, many AMCs now provide NRIs with the facility of video KYC from overseas, so you do not need to visit India or the Indian embassy.

Step 3: Choose Your Fund

Not all multi-asset funds are the same. Some are more conservative (40-50% equity), while others lean heavily on equity (60-70%). So when choosing a fund, match it with your financial goals and risk tolerance.

  • Aggressive Investors: Opt for funds with 60%+ equity allocation.
  • Moderate Investors: Choose balanced funds with 45-55% equity.
  • Conservative Investors: Select funds with higher debt allocation (50-60%).

Step 4: Invest via Lump Sum or SIP

There are two ways in which you can invest in multi-asset allocation funds:

  • Lump Sum: It is a one-time investment option. It is a good option if you have a large corpus sitting non-functioning.
  • Systematic Investment Plan (SIP): In this, you have to make monthly investments. Compared to a lump sum, for most investors, SIP is a safer investment option, specifically when opting for the best multi-asset funds for long-term wealth generation.

Further, a combination of investing in both is also a good option, i.e., 60% as a lump sum and 40% via SIP for more than 12 months.

So, here are the steps to invest in multi-asset allocation funds.

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Final Thoughts

Lastly, multi-asset allocation funds offer a comprehensive, diversified investment strategy. It is a suitable option for investors who have less time for active management and lower risk tolerance. Additionally, multi-asset allocation funds for NRIs are also good options for diversifying their portfolios.

Further, seeking to invest in India with confidence? Savetaxs offers expert fund recommendations, research-backed insights, and seamless investing to NRIs. Connect with us now to start building a diversified investment portfolio.

Note: This guide is for informational purposes only. The views expressed in this guide are personal and do not constitute the views of Savetaxs. Savetaxs or the author will not be responsible for any direct or indirect loss incurred by the reader for taking any decision based on the information or the contents. It is advisable to consult either a CA, CS, CPA, or a professional tax expert from the Savetaxs team, as they are familiar with the current regulations and help you make accurate decisions and maintain accuracy throughout the whole process.

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Pankaj Shaw (Tax Expert)

Mr Shaw brings 8 years of experience in auditing and taxation. He has a deep understanding of disciplinary regulations and delivers comprehensive auditing services to businesses and individuals. From financial auditing to tax planning, risk assessment, and financial reporting. Mr Shaw's expertise is impeccable.

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Frequently Asked Questions

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Yes, NRIs can invest in multi-asset allocation funds in India using their NRO or NRE account. For this, they need to first complete their KYC with NRI-specific documents and invest in Indian rupees only.

Generally, most multi-asset funds have an INR 5,000 minimum lump sum investment amount. Additionally, SIP can start with INR 500 to INR 1000 per month.

It totally depends on the risk tolerance of a person. Multi-asset funds, compared to equity funds, are less volatile and have better moderate-risk investors. Considering this, if you can handle 20-30% downside and have a 10+ horizon, then equity funds can be a good option for higher returns.

On multi-asset funds, TDS is deducted at source when you redeem. For short-term equity gains, the tax rate is 20% and for long-term equity gains, it is 12.5% if the amount is more than INR 1,25,000. Additionally, for debt-oriented funds, TDS is 30% or as per your income slab rate.

Both multi-asset funds and Gift City FDs serve different purposes. Multi-asset funds provide higher returns, i.e., 12-15% but have market risk. Gift City FDs offer US-based, tax-free, capital-protected returns of 4-5% to investors.