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Multi-asset funds: the all in one approach

Multi-Asset funds are on the rise. Key hires in the area have been made by big players in the market such as BlackRock, Invesco Perpetual and Hermes Investment Management. But what's driving interest towards a product which has been labelled as "set and forget" investment?

Following the financial crisis of 2008, the financial industry had a lot of soul searching to do. Investors were less than impressed to hear that their funds had lost "slightly less” of their investments than they would have done on the underlying indices making up the investment product. Fund managers had to give thought to what their customers actually wanted and what they could come up with that would be palatable to their customers in terms of risk and return.

Multi-Asset Funds are more about outcomes than beating specific benchmarks. In a market environment where most clients want to see profit rather than information about which particular markets are performing well, multi assets have started to perform well as managers build an approach based on a client’s requirements rather than creating portfolios from the ground up.

Placed at the core of a portfolio, a Mulit-Asset fund can be especially interesting for an investor with a smaller amounts to invest. Structured to provide equitable returns but with lower volatility, some multi asset funds have been labelled “hedge funds for retail investors”.

With less management comes the prospect of less fees and with interest rates dwindling at eternally low rates, the move to multi asset funds is a trend which is set to continue.

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We’ve been conducting our annual examination of the trends in multi-asset investing, in both the UK and North America where the product category has been slower to develop but is now gathering pace.

To read the views shared by our UK and North American asset owner contributors, register to download (at no cost) our Multi-Asset Strategies Investing, North America 2017 and Diversified Growth & Multi-Asset Funds 2017 reports, and subscribe to receive notifications of our wider Investment Strategy & Asset Class focussed events, reports and surveys.

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