UTI vs Tata Multi Asset Opp Fund: Stable Choices in Volatile Markets

Indian benchmark indices such as NIFTY 50 and BSE Sensex have plummeted swiftly, separating short-term noise from significant trends has become more challenging, and market timing has proven to be an unreliable method for protecting investments.

Investors seeking to forecast the market bottom frequently get caught up in false recovery traps. Trying to time the market could lead to early purchases or avoiding a good entry point altogether.

[Read: Navigating Market Volatility: Why Time in the Market Is Better Than Timing the Market]

With these unknowns, diversifying investments between asset classes such as equities, debt, gold, and international markets can minimize overall risk and enhance stability. This tactic allows investors to reduce losses when there are quick corrections and capture potential recovery cycles.

Multi-asset funds, specifically, are built to diversify money across equities, debt, and commodities like gold, re-adjusting their weightage based on market movements. Such flexibility keeps portfolios better poised to absorb shocks from the market.

While predicting the exact bottom is not probable, having a multi-asset approach could enable investors to ride out volatility and protect financial objectives.

Note: In my previous article, I covered the two multi-asset allocation funds offering significant returns. You may consider reading - ICICI Pru Multi-Asset Fund vs Quant Multi-Asset Fund: Which One is Riskier?

In this article, we will compare the two funds under the multi-asset category - UTI Multi-Asset Allocation Fund and Tata Multi Asset Opp Fund across key parameters to help you decide which fund is most suitable for your needs.

# - UTI Multi-Asset Allocation Fund

UTI Multi-Asset Allocation Fund is an open-ended well-established scheme under the Multi-Asset strategy. Launched in December 2008, the fund currently has an AUM of Rs 4,978.81 crores (as of Feb 28, 2025).

The fund actively adjusts its portfolio based on market conditions, aiming to capture growth opportunities while maintaining stability. Its equity allocation typically focuses on quality stocks with strong fundamentals, while the debt portion emphasizes stability through high-rated instruments.

# - Tata Multi Asset Opp Fund

Tata Multi Asset Opp Fund launched in March 2020, currently has an AUM of Rs 3,337.44 crores (as of Feb 28, 2025).

The scheme adopts a dynamic investment approach that strategically balances equity, debt, and commodity-linked instruments such as gold and silver. The fund seeks to leverage growth opportunities in equity markets while using debt investments to provide stability and mitigate downside risks. Additionally, the fund's exposure to alternative asset classes helps diversify risks and improve overall portfolio returns.

• Performance Comparison: Rolling Returns

  Scheme Name	Absolute (%)		CAGR (%)
  	6 Months	1 Year	3 Years	5 Years	7 Years
  UTI Multi-Asset Allocation Fund	12.04	32.63	18.83	16.46	12.53
  Tata Multi Asset Opp Fund	8.86	23.44	16.04	18.92	-
  Multi-Asset Funds - Category Average	6.83	14.62	16.33	19.05	14.95
  Benchmark - Nifty 500 TRI	-12.24	7.42	13.41	26.36	14.17
  CRISIL Composite Bond Index	3.40	8.41	6.69	7.03	7.50

  Data as of February 28, 2025
  Do note past performance is not an indicator of future returns
  The securities quoted are for illustration only and are not recommendatory.
  (Source: ACE MF, data collated by PersonalFN Research)  

  For the short term, UTI Multi-Asset Allocation Fund gave a whopping 32.63% return, dwarfing Tata Multi Asset Opp Fund (23.44%) along with the category average and the benchmark.

  Even in medium and long-term time frames, the UTI Multi-Asset Allocation Fund has been ahead of its game. Tata Multi Asset Opp Fund, although behind UTI, has still produced good returns that have been on par with the category average and benchmark in the majority of instances.

  Both funds have successfully blended equity, debt, and other asset classes to manage volatility and achieve decent returns. Stable yet growth-focused investors would prefer the UTI Multi-Asset Allocation Fund due to its consistent outperformance, while those with a long-term investment horizon might like the Tata Multi Asset Opp Fund due to its decent 5-year record.

• Portfolio Composition: Asset Allocation of Schemes

  Scheme Name	Large Cap %	Mid Cap %	Small Cap %	Others
  UTI Multi-Asset Allocation Fund	51.91	13.13	0.09	34.85
  Tata Multi Asset Opp Fund	45.92	7.28	10.79	35.99

  Data as of February 28, 2025
  Do note past performance is not an indicator of future returns
  The securities quoted are for illustration only and are not recommendatory.
  (Source: ACE MF, data collated by PersonalFN Research)  

  UTI Multi-Asset Allocation Fund focuses on large-cap stocks, with an investment of 51.91% in the same. This is followed by an investment in mid-cap stocks worth 13.13%. The fund takes growth potential through its investment in mid-cap stocks. Its minimum exposure to small-cap stocks of 0.09% shows its conservative tendency in risk-sensitive areas.

  Moreover, the fund also has a substantial 34.85% investment in 'Others,' presumably debt securities, gold, and foreign equities - essential pieces for diversification and risk aversion.

  In contrast, the Tata Multi Asset Opp Fund has a more conservative approach, at 45.92% large caps, lower than the UTI fund. Its 7.28% weighting in mid-cap stocks is relatively low, but the fund makes up for this with a relatively higher 10.79% weighting in small-cap stocks. This is a more aggressive tilt, though, seeking to exploit high-growth potential in smaller firms.

  35.99% allocation of the fund in 'Others' reflects UTI's diversification policy, having a mix of equity, debt, and alternative investments to balance risk.

• Market Volatility: Risk Profile of Schemes

  Risk Ratio (3 years)	UTI Multi-Asset Allocation Fund	Tata Multi Asset Opp Fund
  Standard Deviation	9.41	8.57
  Sharpe Ratio	0.34	0.25
  Sortino Ratio	0.72	0.52

  Data as of February 28, 2025
  Do note past performance is not an indicator of future returns
  The securities quoted are for illustration only and are not recommendatory.
  (Source: ACE MF, data collated by PersonalFN Research)  

  UTI Multi-Asset Allocation Fund has a much higher Standard Deviation of 9.41 than that of Tata Multi Asset Opp Fund at 8.57, showing more volatility in returns.

  UTI Multi-Asset Allocation Fund delivers better risk-adjusted returns, as reflected in its superior Sharpe Ratio of 0.34 versus Tata's 0.25. This means UTI's fund has provided higher returns per unit of risk taken. Similarly, its Sortino Ratio of 0.72 - significantly higher than Tata's 0.52 - suggests better downside risk management.

  Overall, although the Tata Multi Asset Opp Fund looks less volatile, the UTI Multi-Asset Allocation Fund has a better risk-adjusted performance. Those who want higher returns with an acceptable level of risk may favour the UTI fund, while those with a low-risk tolerance might favour the Tata fund due to its relatively smoother ride.

• Top Holdings of the Multi-Asset Schemes

  UTI Multi-Asset Allocation Fund		Tata Multi Asset Opp Fund
  Company	% Assets	Company	% Assets
  Government of India	12.20	Government of India	11.07
  ICICI Bank Ltd.	4.48	HDFC Bank Ltd.	5.31
  Reliance Industries Ltd.	3.47	Reliance Industries Ltd.	4.15
  Infosys Ltd.	3.22	ICICI Bank Ltd.	4.06
  Bharti Airtel Ltd.	3.02	Larsen & Toubro Ltd.	2.38
  Tata Consultancy Services Ltd.	2.68	Bharti Airtel Ltd.	2.37
  ITC Ltd.	2.44	State Bank Of India	2.36
  Mahindra & Mahindra Ltd.	2.32	Axis Bank Ltd.	2.20
  Trent Ltd.	2.26	Infosys Ltd.	1.48
  Small Industries Development Bank of India	2.00	Tata Consultancy Services Ltd.	1.29

  Data as of February 28, 2025
  Do note past performance is not an indicator of future returns
  The securities quoted are for illustration only and are not recommendatory.
  (Source: ACE MF, data collated by PersonalFN Research)  

  UTI Multi-Asset Allocation Fund has a diversified portfolio with a 12.20% allocation to government securities for stability. Its key equity holdings include ICICI Bank (4.48%), Reliance Industries (3.47%), and Infosys (3.22%), with exposure across financials, IT, and consumer sectors. Stocks like ITC (2.44%) and Trent (2.26%) further balance growth and defensiveness.

  The Tata Multi Asset Opp Fund also holds 11.07% in government securities, with a stronger focus on financials through HDFC Bank (5.31%), ICICI Bank (4.06%), and SBI (2.36%). It also invests in key industrial and telecom players like L&T (2.38%) and Bharti Airtel (2.37%), with lower IT exposure than UTI.

  While UTI offers broader sector diversification, Tata leans more heavily on financials and industrials, appealing to investors seeking stability with growth potential.

• Expense Ratio of the Schemes

  Scheme Name	Direct Plan Expense Ratio	Regular Plan Expense Ratio
  UTI Multi-Asset Allocation Fund	0.41%	1.77%
  Tata Multi Asset Opp Fund	0.49%	1.87%

  Data as of February 28, 2025
  Do note past performance is not an indicator of future returns
  The securities quoted are for illustration only and are not recommendatory.
  (Source: ACE MF, data collated by PersonalFN Research)  

  UTI Multi-Asset Allocation Fund and Tata Multi Asset Opp Fund have a significant difference in both regular & direct plan expense ratios. However, UTI has a lower expense ratio in both the plans when compared to Tata's Fund.

  A lower expense ratio can lead to better net returns over time, especially for long-term investors, presenting the UTI Multi-Asset Allocation Fund as the more cost-effective option.

  However, expense ratios alone shouldn't drive decisions. Do consider other metrics like risk-adjusted returns, asset allocation strategy, and the investment processes followed by the respective mutual fund house to make a well-rounded investment decision.

• Suitability of Investors to the Schemes

  The UTI Multi-Asset Allocation Fund suits conservative to moderate investors seeking stable growth with lower volatility, given its strong short-term and long-term performance. Meanwhile, the Tata Multi Asset Opp Fund is ideal for investors with a longer horizon, offering strong 5-year returns and growth potential despite slower short-term gains.

  Both funds provide diversified exposure across asset classes for balanced risk management.

To Summarise...

In the current volatile market conditions, hybrid mutual funds like UTI Multi-Asset Allocation Fund and Tata Multi Asset Opp Fund offer diversification benefits, helping investors balance risk and reward effectively.

Ultimately, the right choice for the addition of multi-asset allocation funds to your portfolio depends on individual financial goals and risk tolerance. Regularly monitoring portfolio performance and staying put through market fluctuations is crucial to generate long-term wealth and achieve the envisioned financial goals.

Happy investing!

We are on Telegram! Join thousands of like-minded investors and our editors right now.

MITALI DHOKE is a Research Analyst at PersonalFN. She is an MBA (Finance) and a post-graduate in commerce (M. Com). She focuses primarily on covering articles around mutual funds including NFOs, financial planning and fixed-income products. Mitali holds an overall experience of 4 years in the financial services industry.
She also actively contributes towards content creation for PersonalFN’s social media platforms in the endeavour to educate investors and enhance their financial knowledge.
 

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.
This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision in the above-mentioned schemes.