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Multi-assets: pros and cons

“The merits of a multi-asset fund is broad diversification and professional management. The attraction is the ability of the manager to move between asset classes to improve returns.

“However, sometimes this is another version of the ‘emperor’s new clothes’. The investment management world keeps coming up with new ways of enticing people to invest with them and this is just one of the latest ones.

“The majority of active fund managers cannot beat the market in a single year, that is supported year in, year out by the statistics. And those that do, cannot do so consistently. Most analysts were pessimistic about equities at the start of 2012 and look what happened. It will be no different with those managers running multi-asset funds.

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“If investors want a hands-off approach they first need to understand what level of risk they are comfortable with and what level of return they need. This should be achieved in a regularly rebalanced and diversified portfolio that keeps costs and tax as low as possible. Above all investors need patience and to keep their emotions out of investing.”