AlphaGrep Multi Asset Allocation Fund: NFO Guide for MFDs

Multi-Asset Allocation Funds have quietly become one of the fastest-growing categories in the mutual fund industry. AlphaGrep's Multi-Asset Allocation Fund NFO is one of the first MAA funds in India to run a fully quantitative asset allocation model. The fund allocates across equity, debt, gold, silver, copper, and crude oil using two proprietary engines — one for deciding how much to put in each asset class, another for picking which securities to hold within each. Here's what MFDs and investors need to know before it closes.

What are Multi-Asset Allocation (MAA) Funds?

A Multi Asset Allocation Fund is a hybrid mutual fund category that must invest across at least three asset classes, typically equity, debt and commodities like gold or silver, with a minimum allocation to each as prescribed by SEBI's categorisation norms. Instead of the investor deciding when to shift from equity to debt to gold, the fund manager does it for them.

The category has gained popularity in the past 2 years, driven by range-bound markets and marketing efforts of AMCs. As per AMFI, the AUM of this category has gone up 2.5x from ~Rs. 77,000 crores in May 2024 to ~Rs. 1,90,000cr in May 2026.

Most of that money has gone into funds with fairly stable, human-decided allocation bands. AlphaGrep wants a slice of it with a different pitch entirely: no discretionary calls, just a model.

Not All MAA Funds Are the Same

Based on the approach applied by the AMC, MAA Funds can broadly be classified as:

Stable Allocation

These funds maintain broadly stable allocation towards equity, debt and gold. There may be small changes (<5-10%) based on the market conditions, but the broader allocation stays stable. These can further be classified into:

• Conservative – Inherently have a high allocation to debt. Suitable for investors who want stable returns but some upside participation from equities

• Aggressive – High equity allocation or concentrated bets on gold/silver. Suitable for investors who want some de-risking relative to a pure-equity portfolio.

• Moderate/Balanced – Balanced allocation across equity and debt, with gold used to reduce portfolio risk. Allocation shifts to some extent based on market conditions.

In our experience, a majority of MAA funds fall within this category – offering predictability to investors in terms of allocation, taxability and overall risk profile.

Tactical Allocation

Some funds take a more active approach. Fund managers increase or reduce allocations depending on market valuations, economic conditions, interest rate expectations or other macro factors. These strategies rely significantly on the judgement and experience of the investment team.

Quantitative Allocation

A relatively newer approach is QUANTITATIVE or model-driven allocation.

Instead of relying primarily on human judgement, investment decisions are generated using predefined quantitative models that analyse large amounts of market data.

This is where AlphaGrep's new fund distinguishes itself.

How to Choose the Right MAA Fund?

When evaluating MAA Funds, an investor needs to look at a few more things than a normal equity fund. Some of them are listed below:

How dynamic is the asset allocation?

Investors should see historical asset allocation of the fund they are evaluating – has the allocation shifted during different market cycles? If it has not, then you are probably holding just another equity or hybrid fund that is not dynamic.

As per data compiled by AlphaGrep, the industry average asset allocation stayed broadly stable between 2022 and 2026 – with equity allocation ranging from 56% to 65%, debt allocation from 22% to 26% and gold from 12 to 17%.

A static allocation might be suitable for some investors who prefer predictability, while investors who want actual ‘dynamic’ allocation would prefer a more tactical approach (or at least an allocation that changes when market cycles change). The only way to figure that out is by looking at historical allocations across cycles.

How does it fit your risk profile?

Identify the risk category of the fund and whether it aligns with what you are trying to achieve. An aggressive MAA for an already equity-heavy portfolio may be of limited use.

Further, try to understand the broader allocation strategy of the Fund – from fund documents, publicly available manager interviews, etc. For MAA Funds, understanding the allocation process may matter more than comparing past returns.

The AlphaGrep MAA NFO: What you Need to Know

AlphaGrep recently received approval to launch mutual funds, and their first offering is a MAA Fund.

About AlphaGrep

AlphaGrep is not a traditional asset management company entering quantitative investing. In many ways, it is the reverse.

The firm has spent over 16 years operating as a proprietary investing firm. Around 4 years ago, it expanded into asset management through Alternative Investment Funds, Portfolio Management Services and outbound investment strategies based out of GIFT City.

Its mutual fund offering now brings this quantitative investing experience into the Multi-Asset Allocation category.

The Investment Team behind AlphaGrep AMC

Investment strategy is led by Praveen Kumar, who has 16+ years of experience across quantitative trading, portfolio management and investment strategies across multiple asset classes. He looks after the product and investment strategy, while overseeing risk and capital allocation at AlphaGrep.

He was part of the proprietary trading team at Edelweiss where he helped setup and scale the quantitative trading desk and also co-managed its long-short category III AIF.

He is supported by a team of fund managers and researchers with backgrounds spanning BlackRock, Morningstar, Goldman Sachs, and CRISIL.

The broader business is helmed by CEO Bhautik Ambani, who previously helped grow Avendus Capital's Alternate Strategies business into one of the largest onshore hedge funds in India.

AlphaGrep’s Quant-based MAA Framework

The distinguishing feature of the fund is its quant-based investment framework, which may be among the first in MAA category.

As per the AMC, the fund will follow a two-engine investment framework:

• Asset Allocation Engine: This proprietary model determines how much should be allocated to each asset class. Some of characteristics of this model are risk parity across classes, sharpe ratio optimization (for better risk-adjusted returns), macro-economic overlay (inflation, growth, liquidity cycles, etc.).

  This allocation is reviewed and rebalanced every week based on the model's assessment of market conditions.

• Security Selection Engine: A separate model is responsible for deciding which securities should be held within each asset class. For equities, this model considers various traditional factors (like earnings yield, P/B, Cash flows, ROE, Earnings stability, leverage, momentum, etc.) as well as additional proprietary factors based on earnings revisions, sentiment, microstructures, ownership, events, seasonality, etc.
  This allocation is reviewed and rebalanced daily.

While the model is proprietary, AMC claims that this has been used for their own investing strategies and is based on globally popular sub-models.

Back-Testing the Results

AlphaGrep have published results of back-testing their framework from 2007 to April 2026.
The model showed ‘active’ asset allocation changes between asset classes, with equity average exposure at ~28.5%.

In terms of returns, the backtest shows a CAGR of 14.17% (compared to Nifty return of 11.29%), at much lower volatility and better Sharpe Ratios.

Note – It is unclear if the returns presented here are pre-expenses or post expenses

The Key Risks MFDs should Flag

With that re-balancing frequency (and with quant-based schemes in general), the transaction costs are expected to be very high. As per the AMC, they have negotiated a 1bps brokerage (for cash equity) with reputed brokers (against regulatory limit of 6bps for mutual funds), which will help them reduce the TER. Higher portfolio churn is a key risk as frequent rebalancing can eat into your returns.
Further, there have not been (m)any quant-based MAA Funds in the Indian markets – so there is no way to know how these perform in real world. Yes – the AMC has shared back-tested results with favourable risk-return characteristics compared to selected peers – but investors should remember that back-testing reflects how a model would have behaved historically and should not be interpreted as a guarantee of future performance.

Asset Class & Taxation

Most investors associate MAA Funds with a combination of equity, debt and gold. AlphaGrep MAA Fund intends to include copper and crude as well in their commodity universe.

The equity allocation is expected to be between 35% and 65%. This means the taxability of gains is as follows:

·       Capital Gains will classify as long term, if held for more than 24 months

·       Long-Term Capital Gains taxed at 12.5%

·       Short-Term Capital Gains taxed at investors slab rates

If you want to compare this NFO against other multi-asset options and track scheme updates in one dashboard instead of juggling AMC portals, see what Creso offers MFDs.