At the end of last year the unexpected fall in the oil price caused shockwaves, while the diverging central bank policies of the US, Europe and Japan continue to affect sentiment. In addition, the deflationary fears across the developed world are also having an impact, with government bonds moving lower in the US, UK and Germany.

This can leave multi-asset investors in a pickle as to what to do, with Chris Jeffery, strategist for asset allocation at Legal & General Investment Management, noting investors are facing a ‘Hobson’s choice’ on whether to stay in bonds at low yields or move to other asset classes with higher risks.

Diversification has always been a watchword for multi-asset investors, and this year is no different – the only slight twist being that income, more than ever, is becoming more important.

The Budget changes in 2014 that introduced new retirement freedoms mean that income solutions, particularly multi-asset vehicles, are stepping into the spotlight as highlighted in Investment Adviser’s recent Spring Investment Monitor.

Looking to the future of multi-asset strategies, Mark Rockliffe, head of intermediary sales at Heartwood Investment Management, notes: “Smoothing the investment journey to create a return shape that is more predictable will be even more important with the anticipated use of the new ‘flexible drawdown’ option, part of the upcoming pension reforms.

“Successful multi-asset class investing is not about winning the race on the way up alone, but it is also about protecting capital on the downside and delivering returns throughout the economic cycle.

“We expect the pension reforms to bring investors back to the first principles of multi-asset investing – spreading investment risk across a variety of asset classes, which tend to outperform at different stages of the market cycle.

“Importantly, a multi-asset approach invests beyond the major asset classes alone, but captures exposure to multiple sub-asset classes, sectors and themes, which are implemented through multiple investment instruments.”

With the new pension reforms coming into force next month, 2015 looks set to be an interesting year, as multi-asset investors seek to look beyond the traditional to find alternative sources of income such as AIM stocks and renewable energy, while at the same time developing a proposition that will cater to the at-retirement market.

Investing in one asset class can be difficult, but trying to juggle a broad range of investments in an environment of low growth, low inflation and low interest rates, coupled with political uncertainty in the UK as the general election approaches, will make this year an interesting one for asset allocation.

Nyree Stewart is features editor at Investment Adviser