RDR has ‘dramatically impacted’ multi-asset market

“So will see a big growth in multi-asset income funds, in particular because they will not just be able to cater to peoples risk but also will produce an income.”

Dan Kemp, head of investment consulting and portfolio management for EMEA at Morningstar, added that there was no one trend across the spectrum of multi-asset funds altogether.

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“We are seeing a move back towards single manager funds, firstly because alpha orientated multi-asset is very complicated to manage, and secondly because they often have a lot of derivative or leverage exposure, which is more complicated to achieve than in a fund-of-funds.

“[Standard Life Investments’ flagship fund] Gars is an obvious example of increasing use of exposure through derivatives. It’s difficult to run a fund that has a high degree of leverage - it is almost impossible to run a fund-of-funds level and keep on a reasonable fee level,” he added.