Towry predicts multi-asset shake-up

Towry’s head of investment warned there is a danger that some multi-asset class solutions have “run out of road a bit.”

In a video panel debate, Mr Wilson said multi-asset funds too focussed on traditional betas may struggle going forward.

During the panel debate on multi-asset, Mr Wilson said: “Well it has been a 30-year bond bull market and we are four or five years into an equity bull market that is getting long in the tooth.

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“That traditional allocation between equities and bonds, to the extent that it is multi-asset, may no longer produce sufficient returns going forwards.

“You may need a slightly more creative, holistic approach where you have a wider range of strategies like using derivatives and being long and short to actually generate a return which your clients need to drive them from A to B to meet their goals.

“I think there is going to be a differentiation that we perhaps have not seen up until now.”

Fellow panelist Patrick Norwood, insight analyst for funds at Defaqto, said within multi-asset risk-targeted and unitised discretionary funds have been the biggest selling types of funds and he added that he expected this trend would continue.

He said: “As Andrew (Wilson) said maybe the solutions will become more creative, with extra use of derivatives.”

The video debate, which can be viewed by clicking here, also features David Millar, head of multi-asset at Invesco Perpetual, explaining the approach he takes to multi-asset investing and his expectations for the sector.