After a historic comeback in U.S. stocks over the past month, Wall Street is again caught in volatile trading triggered by worries about a ballooning U.S. deficit. The 30-year Treasury yield hit its highest since October 2023 as lawmakers passed a bill that could worsen the U.S. deficit. The rise in long-term interest rates- a key benchmark for consumer loans - could strain an economy already burdened by Trump's recently implemented universal tariffs (read: Inverse Sector ETFs to Gain as Yields Surge).

Additionally, there are doubts about how much markets could rise further without concrete trade agreements, despite the recent 90-day tariff pause and the announced breakthroughs with China and the UK.

Amid such a backdrop, multi-asset ETFs could be a solid investment. These ETFs offer exposure to a diversified mix of asset classes—typically equities (stocks) and fixed income securities (bonds)—within a single, tradable vehicle.  These funds aim to balance growth and income, making them particularly relevant amid current macroeconomic uncertainties.

These are often structured around specific investment goals such as risk tolerance, income generation, or long-term growth. Some of the examples include 60/40 stock-bond ETFs, which aim for moderate growth with some downside protection, target-date ETFs, which automatically adjust asset allocations based on a projected retirement date or income-focused ETFs, which may tilt toward bonds or dividend-paying equities to generate steady cash flow.

Why Multi-Asset ETFs

Diversification: By combining stocks and bonds, multi-asset ETFs help reduce portfolio risk. Equities offer growth potential, while bonds provide income and act as a buffer during market downturns. This diversification can enhance risk-adjusted returns over time.

Cost Efficiency: Most multi-asset ETFs have relatively low expense ratios compared to traditional mutual funds. They also benefit from the tax efficiency typically associated with ETFs, including in-kind redemptions that minimize capital gains distributions.

Accessibility and Liquidity: Multi-asset ETFs are traded on major stock exchanges, offering real-time pricing and intraday liquidity. This accessibility is especially attractive to investors looking to adjust portfolios quickly in response to market changes (read: Time to Capitalize on Market Moves With Momentum ETFs?).

Professional Management: Many multi-asset ETFs are actively managed or follow a rules-based approach guided by experienced portfolio managers. This can provide strategic asset allocation and timely rebalancing that individual investors may find difficult to replicate.

Here, we have highlighted multi-asset ETFs with enough liquidity and AUM.

iShares Core 60/40 Balanced Allocation ETF (AOR Quick QuoteAOR - Free Report)

iShares Core 60/40 Balanced Allocation ETF offers a portfolio of underlying equity and fixed income funds intended to represent a growth allocation target risk strategy. It holds a basket of seven same-family ETFs with broad equity accounting for 61.6% share, and the rest taken by fixed income. iShares Core 60/40 Balanced Allocation ETF has AUM of $2.4 billion and charges annual fees of 15 bps. It trades in an average daily volume of 270,000 shares and has gained 4.6% over the past month.  

iShares Core 80/20 Aggressive Allocation ETF (AOA Quick QuoteAOA - Free Report)

iShares Core 80/20 Aggressive Allocation ETF offers a portfolio of equity and fixed income funds intended to represent an aggressive target risk allocation strategy. It follows the S&P Target Risk Aggressive Index and holds seven same-family ETFs in its basket. Equity accounts for 81% while the rest goes to fixed income. iShares Core 80/20 Aggressive Allocation ETF has amassed $2.3 billion in its asset base while trading in an average daily volume of 118,000 shares. It is up 6.3% in a month.

iShares Core 40/60 Moderate Allocation ETF (AOM Quick QuoteAOM - Free Report)

iShares Core 40/60 Moderate Allocation ETF offers exposure to a portfolio of underlying equity and fixed income funds intended to represent a moderate target risk allocation strategy. It tracks the S&P Target Risk Moderate Index and holds seven same-family ETFs in its basket. Fixed income accounts for 57.5% while the rest goes to equity. iShares Core 40/60 Moderate Allocation ETF has AUM of $1.5 billion and charges 15 bps in annual fees. It trades in an average daily volume of more than 150,000 and has gained 2.9% in a month (see: all the Total Portfolio ETFs here). 

iShares Core 30/70 Conservative Allocation ETF (AOK Quick QuoteAOK - Free Report)

iShares Core 30/70 Conservative Allocation ETF offers exposure to a portfolio of underlying equity and fixed income funds intended to represent a conservative target risk allocation strategy. It follows the S&P Target Risk Conservative Index and holds seven same-family ETFs in its basket. Fixed income accounts for 67.7% while the rest goes to equity iShares Core 30/70 Conservative Allocation ETF has gathered $628.9 million in its asset base and charges 15 bps in annual fees. It trades in an average daily volume of about 136,000 and has gained 2.1% in a month. 

Multi-Asset Diversified Income Index Fund (MDIV Quick QuoteMDIV - Free Report)

Multi-Asset Diversified Income Index Fund tracks the NASDAQ US Multi-Asset Diversified Income Index, which provides exposure to multiple asset segments, each selected to result in a consistent and high yield for the index. It holds 122 stocks in its basket with dividend-paying equities accounting for 21.6%, followed by high-yield corporate bond ETFs (20.9%), preferred securities (20.6%), REITS (19.3%), and MLPs (16.5%). Multi-Asset Diversified Income Index Fund has amassed $454.8 million in its asset base and trades in an average daily volume of 1.9,000 shares. It charges 75 bps in annual fees and is down 0.2% in a month.