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Introducing Multi-Asset Funds
16 Sep 2016

Multi-Asset funds are funds that invest across a wide range of asset classes which may include equities, bonds, cash, commodities and alternatives amongst other. These type of funds provide a greater degree of diversification than investing in a single asset class, thus help to mitigate the volatility that comes with investing in a one asset class.

Multi-Asset funds arguably play a role in a low-interest scenario and volatile investment environment, in view of the fact that the switching process between assets is simplified. Many managers of multi-asset funds also hedge some risks and add an overlay of short-term tactical asset allocation to maximize return.

An active approach to managing risk across the range of asset classes is an important element when setting up an investments strategy. The Fund manager generally seeks to increase exposure to asset classes with a positive stance. Concurrently he seeks to reduce exposure to asset classes where the outlook is negative.
 
Such funds may also invest in strategies that rely less on overall market direction. Real assets is another asset class that these type of funds usually invest in, such as infrastructure which provides solid income streams that are somewhat detached from the economic cycle. Other investment opportunities within this asset class are income derived from utility companies, green energy, social infrastructure and aircraft leasing. In general, these type of funds can offer more stable returns across different market conditions.

Multi-asset funds are also available to retail investors, as they can provide different risk profiles and, in view of their multi-asset exposure, are ideal investment solutions for those investors with a small investment capital. These type of funds, which are available in the local market, are managed by a professional team with a sound background in asset allocation, macroeconomic analysis and portfolio construction. Multi-asset funds developed a clear and transparent investment process that allows ideas to be channeled into a robust portfolio specifically designed to meet its objectives.

Published on The Commercial Courier - September 2016

 

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