Demand for multi-asset funds set to surge

Research conducted by fund house Architas Multi-Manager found that more than three-quarters of advisers, 83 per cent, were likely or very likely to bump up their multi-asset exposure this year.

According to the survey of 262 advisers, the biggest factors driving this trend was the desire for diversification, cited by 36 per cent of advisers, and the opportunities for risk profiling, a reason offered by 27 per cent of advisers.

Cedric Bucher, head of business development at Architas, said the move was understandable given the recent volatile atmosphere in markets.

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He added: “There is also a move away from a stock-picking approach by advisers. This is being driven in part by regulatory pressures, as a result of the RDR, and the increased emphasis on client suitability.”

The statistics came shortly before Legal & General unveiled five risk-targeted multi-asset funds. These offer investors the chance to access global equities and bonds through its index-tracking funds and invest in UK property through the L&G UK Property Trust.

The funds are available on, what managing director Simon Pistell has called, a “low-cost” basis, with an annual management charge of 0.25 per cent.

Explaining the decision to launch the new funds, Mr Pistell said: “Many advisers are looking for low-cost investment solutions that are easy to match to their clients’ risk profiles. They want to reduce their focus on monitoring the fund universe and rebalancing portfolios, and add value to other parts of the advice and investment process instead. At the same time, investors are looking for simple and effective ways to save and invest for the future.”

Adviser view

Mark Hoskins, senior partner at London-based Holden & Partners, said: “Multi-asset funds in general are very useful for clients with assets under £100,000 as risk profiling them accurately could be a problem. However, it waits to be seen what the total expense ratio would be, as this could be a different proposition from the AMC.”