After witnessing strong investor interest for much of the past year, Gold ETFs and multi asset allocation funds saw a moderation in flows in the latest month, according to Association of Mutual Funds in India (AMFI) data. Gold ETFs recorded a net outflow of Rs 725 crore, while inflows into multi asset allocation funds declined 23% month-on-month to Rs 3,928 crore.This shift has raised questions about whether investors are losing interest in these categories, moving back towards pure equity funds, or reassessing their asset allocation strategies. Experts, however, believe investors should avoid drawing broad conclusions from a single month's data and instead focus on their long-term portfolio objectives.Also Read | Gold ETFs see first outflow in a year, silver ETFs bleed for fourth straight month Expert, Rajesh Minocha, a Certified Financial Planner (CFP), Founder of Financial Radiance told ETMutualFunds that a single month's flow data should not be over-interpreted. "Gold has run up a lot, and a few investors may have taken profits. With multi-asset allocation funds, the moderation in inflows might just reflect a shift in investor preferences rather than a drop in confidence," he said.Minocha further said that existing investors should avoid reacting to near-term trends and keep their allocations aligned with their longer-term asset allocation plan and rebalancing, instead of chasing recent performance, remains the right move.Shivam Pathak, CFP and Founder of Asset Elixir shared with ETMutualFunds that the outflows are largely driven by profit booking after a strong rally in gold and some shift in investor preference towards pure equity funds and existing investors should stay invested and review allocations only if they have moved materially away from their long-term asset allocation targets.Could Gold ETFs see a revival if prices correct further?In May, gold ETFs saw an outflow of Rs 725 crore, compared with an inflow of Rs 3,040 crore in April. The last outflow in gold ETFs was in April 2025, at Rs 5.82 crore.Gold ETFs have experienced significant investor interest over the past few years as investors sought protection against inflation, geopolitical uncertainty and currency volatility but the recent outflow has sparked debate over whether investor sentiment towards gold has weakened or whether flows could return if prices moderate. Pathak firmly said yes, a meaningful correction could attract fresh investor interest as gold continues to play an important role as a hedge against inflation, currency volatility, and geopolitical uncertainty and additionally the long-term investment case for gold remains intact.Minocha said that Gold ETF flows are often tied to price moves and investor sentiment so if we see a real pullback, it could even perk up interest, as long-term investors tend to view it as a chance to accumulate. He further said that the strategic case for gold, as a portfolio diversifier and a hedge against global uncertainty, inflation, and currency risks, still holds and near-term flows shouldn’t be read as a sign of structural weakness.All-weather investment vehicles - multi asset allocation funds losing sheen?Multi-asset allocation funds invest across equities, debt and commodities such as gold and silver, offering built-in diversification within a single scheme. For many investors, this structure reduces the need to actively rebalance portfolios during uncertain market phases. These funds are often positioned as all-weather investment vehicles because they invest across multiple asset classes and the recent decline in inflows has led some investors to question whether these funds will remain attractive or are they losing sheen?Also Read | AMFI Data: Mutual fund SIP inflows slip 1% to Rs 30,954 crore in May Minocha said the recent dip in inflows really does not, in my view, reduce the overall pull of multi-asset allocation funds for long-term investors as these funds have this core strength in how they spread risk across equity, debt, and gold, so the ride is less bumpy in terms of portfolio volatility, and investors often feel less need to actively rebalance all the time. As a result, they still look like a good fit for investors seeking a disciplined, all-weather approach, Minocha further said.To this, Pathak said that no, the short-term inflow trends do not determine the effectiveness of a multi asset strategy as these funds continue to offer diversification across equity, debt, and gold, making them a suitable option for investors seeking a balanced approach to wealth creation.Inflow trendIn January 2026, multi asset allocation funds received the highest ever inflow of Rs 10,485 crore and post them the inflows in the category have been continuously declining on a monthly basis. In February, the inflows declined by 19%, followed by a decline of 39% in March and a decline of 2% in April.The decline in inflows in multi asset allocation funds in May marked the fourth consecutive month of declines.Silver ETFs recorded an outflow of Rs 2,133 crore in May, against an outflow of Rs 126 crore in April. Over the past four months, silver ETFs have seen total outflows of Rs 3,770 crore, with May registering the highest outflow in the period.Gold and silver as precious metals have drawn attention as both are traditionally seen as hedges during periods of uncertainty. Gold is often preferred for capital protection, while silver benefits from both safe-haven demand and its industrial use. Their inclusion in multi-asset funds has helped investors balance growth with stability.Allocation to have in multi asset allocation funds and Gold ETFsIn May, gold ETFs delivered an average return of 4%, with Zerodha Gold ETF offering the highest return at 4.07% and The Wealth Company Gold ETF recording the lowest at around 3.92%.Multi asset allocation funds in May delivered an average return of 0.74%. Quant Multi Asset Allocation Fund delivered the highest return of 3.52% and Franklin India Multi Asset Allocation Fund gave the lowest positive return of 0.04%. HDFC Multi-Asset Allocation Fund lost the most of around 0.53% in May.Also Read | AMFI Data: Equity mutual fund inflows tumble 40% to Rs 22,907 crore in May Commenting on the allocation to have, Pathak said a 10-15% allocation to gold can help improve portfolio diversification and manage risk and multi asset funds can form 20-30% of a moderate-risk portfolio, particularly for investors looking for a disciplined and diversified investment solution.Minocha said that gold should be thought of more as a portfolio diversifier, not so much a straightforward return driver and for most people, an allocation of 5-10% is usually enough. He further said that multi-asset allocation funds can serve as a practical core holding for investors who want a professionally managed, broadly diversified portfolio, especially if they don’t want to make those active asset allocation decisions themselves and this should align with the investor’s financial targets, risk tolerance, and their current portfolio, not a generic number.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in alongwith your age, risk profile, and Twitter handle.