Multi-asset funds should be shortlisted

Speaking as Prudential research revealed that multi-asset funds had beaten investors’ expectations during the past three years, the managing director of Shropshire-based Philippa Gee Wealth Management said: “They are not the solution for everyone, but in general multi-asset funds should be a consideration for all advisers.”

A survey of more than 1000 DIY investors by Prudential found that in the past three years investors have been expecting yearly returns of 3.8 per cent in a multi-asset fund when investing £5000, compared to an average actual return of 5.4 per cent.

Paul Fidell, investment expert at Prudential, said: “Investors have actually been overly pessimistic and multi-asset funds can be particularly effective for those looking to manage risk.”

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Meanwhile, sluggish economic conditions have driven investors to adopt a more flexible asset allocation approach, Michael Schoenhaut has said.

The portfolio manager at JP Morgan Asset Management Solutions Group said outsourcing some investment activity to multi-asset funds, such as its JPM Global Income fund, suggested a “trend” that saw the investments as a sustainable source of income.