New Delhi, March 13 -- Multi-asset allocation funds have emerged as the new favourite among mutual fund investors. Multi-asset funds received the highest inflows of Rs.8,476 crore in February, per Association of Mutual Funds in India (Amfi) data.

In an interview with Mint, Deepak Shenoy, chief executive officer (CEO) of Capitalmind AMC, explains how these funds work, who they are suitable for and whether investors risk chasing yet another market fad. Edited excerpts

Multi-asset funds were created for a certain type of investor. These funds invest across equity, fixed income and a third asset class such as commodities. Commodities usually mean gold and silver, but can also include oil, natural gas, copper and other industrial metals.

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