As markets fluctuate due to economic changes, global events, elections, or shifts in investor sentiment, specific investment approaches are better equipped to navigate the ride. Two innovative strategies that help investors stay balanced through all kinds of market cycles are Dynamic Asset Allocation (DAA) and Multi Asset Allocation (MAA).
While both aim to grow your money while reducing risk, they go about it differently. Let’s break it down in simple terms:
What is Dynamic Asset Allocation (DAA)?
Think of DAA like a competent driver changing lanes based on traffic. These funds shift between equity and debt depending on market conditions. If stocks are expensive, they move to debt; when stocks are cheap, they shift back.
Example: In 2020’s market crash, many DAA funds cut stock exposure to reduce losses and re-entered as markets recovered– doing the hard work for you.
Also known as Balanced Advantage Funds (BAF), DAA is ideal for investors seeking automated investing with lower volatility.
What is Multi Asset Allocation (MAA)?
MAA is like a well-balanced thali- always served with variety. These funds invest across at least three asset classes (like equity, debt, and gold) at all times. Some even include real estate or commodities.
Example: When stocks fall, gold usually rises. MAA funds help cushion market shocks by spreading risk across assets. It is ideal for those seeking built-in diversification and more stable returns.
What Does The Data Say?
Schemes on the Rise: MAA’s Rapid Climb, DAA’s Steady March
MAA funds stayed relatively steady between 2019 and 2022, with about 8–10 schemes in the market. But from early 2023, interest spiked- MAA schemes doubled from 13 in Jan 2023 to 28 by April 2025. This reflects a surge in demand for more diversified investment options.
DAA schemes, on the other hand, grew more gradually- from 20 schemes in April 2019 to 35 by April 2025. The steady rise signals consistent interest in DAA, which its market-timing flexibility has driven since even before the COVID pandemic.
From Few to a Flock: How Investor Interest Shifted to MAA
MAA funds started with a modest 6.1 lakh folios in April 2019 and grew to 31.2 lakh by April 2025, with a significant 5x increase from January 2023 onwards. This sharp rise aligned with a spike in gold prices, volatile equity markets, and a growing appetite among retail investors for safer, well-diversified options. Fund houses also stepped up their promotions during this period, fueling adoption.
DAA folios grew from 24.6 lakh (Apr 2019) to 52.5 lakh (Apr 2025). There was a major spurt post-COVID, especially between mid-2021 and early 2022, likely due to recovery optimism. However, after 2022, growth slowed slightly suggesting possible saturation among mature investors and some shifting to MAA strategies.
Money Talks: MAA’s Flow Surge vs. DAA’s Mature Pace
MAA funds have experienced a surge in inflows since 2023 as more investors have begun to favor portfolios that combine equity, debt, and gold. After a slow start, monthly net inflows now regularly exceed ₹2,000 Cr, with a peak of approximately ₹7,080 Cr in January 2024. The sustained momentum signals growing confidence in MAA as an all-weather option.
DAA funds have seen more mixed flows. While they had a standout month with ₹16,571 crore in inflows in August 2021, flows since then have been more volatile—with some months seeing net outflows. Although still popular, the growth pace has eased compared to the rising momentum in MAA funds.
Money Flows: Where Investors Are Putting Their Faith
Growing the Wealth Pot: How Big These Funds Have Become
Source: AMFI Data; EduFund Research
So, What Should You Do?
If you’re looking for market-responsive moves, Dynamic Asset Allocation (DAA) could be your ally. If you prefer steady diversification and long-term balance, Multi Asset Allocation (MAA) is worth considering.
Better yet? Blend both to enjoy the best of flexibility and stability.
Your ideal portfolio strategy could be just one wise decision away.
Review your goals. Revisit your risk profile. Talk to your advisor.
Disclaimer: The data in this presentation are meant for general reading purposes only and are not meant to serve as a professional guide/investment advice for the readers. This presentation has been prepared based on publicly available information, internally developed data, and other sources deemed reliable. Whilst no action has been suggested or offered based upon the information provided herein, due care has been taken to ensure that the facts are accurate and reasonable as of date. The information presented is for informational purposes only and does not constitute an offer to sell or buy a security.
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