In an increasingly volatile investment environment both investors and financial advisors are looking for safety as well as performance. Finding the perfect combination is the holy grail of the financial world.
A well-balanced portfolio can protect against market fluctuations, but a broadly based approach can prove difficult and costly to manage, and this is where multi-asset funds come into play.
As their name suggests these funds contain a wide range of assets and strategies, and can include the usual mix of cash, property stocks and shares.
For the investor locating an independent financial advisor Chippenham, Manchester or Newcastle may be your starting point, and registered advisors can be found at sites such as https://chilvester.co.uk/.
Once you have chosen an advisor there will be no shortage of options to choose from in your search for a multi-asset solution to your needs. There are a massive number of offerings from discretionary managers and fund houses offering different approaches to volatility management and risk assessment.
For example, there are over 300 funds in the Investment Association mixed investment offering. This is an indication of the boom the multi-asset sector has experienced over the past decade, with £221.7bn under management in 2017, an almost four-fold increase since 2008. In 2017 retail sales reached a 10-year high of £13.3bn, more than double the amount of each of the previous three years.
This has been influenced by two major factors: firstly, the extreme volatility of markets in the wake of Brexit negotiations and the fear of global trade wars, and secondly tighter regulation which has seen many IFAs outsource their own investment management. Today’s advisor needs to decide where the real value is for their client and their own business. Is it provided by in-house management and product selection, or are they better focusing on providing financial advice?
These circumstances show little sign of easing, and multi-asset funds’ popularity seems set to continue, as advisors seek to protect portfolios from large market spikes. Whether it is an open-ended fund or a discretionary fund manager the benefit of multi-asset is that it provides a one-fund portfolio solution for the investor. This investment is also easier for the client to understand.
Finally, multi-asset funds have differing objectives and come in all shapes and sizes, so it is important to remember you are not always comparing like with like.