Multi-Asset Investing - March 2012
Multi-asset funds have been suggested by some as the best thing since sliced bread. They offer ready-made packages of portfolios for clients keen to get into the market, and have a variety of complexions, dependent on the emphasis on different types of assets.
But multi-asset funds have run into trouble in recent years, not least because some of the ‘cautious’ funds, were not that risk-averse after all. So the sectors have been reclassified, and as of this April, there should be greater clarity, and more realism over how the different sectors are constituted.
While providers are busy making their adjustments, many are gearing up for the retail distribution review. Many IFAs are worried about what to do with their clients who are on low to middle incomes, and who may not be able to afford fees. For them, claims the industry, multi-asset funds might be the answer. They allow financial advisers to outsource the asset allocation and decision-making process, with ready-made portfolios. Providers argue that these funds have been compiled by investment specialists who can take over the lengthy research exercise needed to construct a portfolio.
However, not everyone buys into these funds - some do not like having the ready-made package and may not like all the assets in the funds.
Nonetheless, for some clients, they could be suitable, so advisers would do well to at least register these funds on their radar, and make a decision for themselves.
This special report is produced in association with Aviva Investors. For fund information, click here.
IN THIS REPORT
Advisers scrutinise multi-asset funds in search for a way of looking after their low and middle income investors after the RDR
Successful multi-asset investing starts with benchmarking, an area investors usually think about the least and can also be left unchanged for years
Fund providers have until the end of April to make changes to their funds to reflect the new IMA sector names
IFAs still need to stick to their guns in terms of what they do well, regardless of increasing market and regulatory change
Increased scrutiny of client charges in fund portfolios means advisers are under more pressure to both justify costs and also pick the top...
An attractive mix of growth and transparent costs
Embracing a variety of asset classes makes sense from both an RDR and an investment perspective.