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Guide to Multi-Asset and Pensions

    Guide to Multi-Asset and Pensions


    In general, for pensions the industry has traditionally focused on pre-retirement and helping savers build up their assets ahead of providing an income by, for most, buying an annuity.

    For investment firms, their target market was therefore wealthier investors through Sipps who were seeking to accumulate capital through both income and growth and were able to treated essentially no differently from a standard investor.

    As a result of the shake-up of access to pensions in April, a number of fund groups are now rethinking the age groups they are targeting and making changes to the way their multi-asset funds operate – in particular the levels of income they generate - to appeal to clients at retirement.

    Multi-asset fund managers argue their investment approach of combining asset classes, such as bonds, equities and cash, results in a diversified portfolio of investments which may provide investors with protection against both specific and systemic risks.

    Within this broad approach, there are different ways of executing multi-asset and there is a wide array of styles, distinguished by the use of securities, derivatives, active managers and passive allocations.

    This guide will look at the different approaches taken to multi-asset investing, what role these vehicles could play in providing a retirement income post-April 2015 and how to pick the most suitable fund for your client.

    Supporting material was provided by: Nick Samouilhan, multi-asset fund manager at Aviva Investors; Mike Parsons, head of UK funds sales at JP Morgan Asset Management; Vincent McEntegart, manager of the Kames Diversified Income fund; Rory McPherson, portfolio manager of Russell Investments; Hannah Sharman, head of sales at Cerno; Patrick Van de Steen, managing director and head of proposition at Hornbuckle; and Peter Toogood, investment director at City Financial.

    In this guide


    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. Why does Mr Parsons say final salary schemes and annuities should not be tossed aside lightly?

    2. What does Ms Sharman say could negate any alpha (outperformance) generated from stock or manager selection?

    3. Why are ‘older’ multi-asset not as well suited to retirees as new generation vehicles, according to Mr Samouilhan?

    4. What does Mr McEntegart think multi-asset fund managers will begin to stress?

    5. What does Mr Toogood say is the key advantage of multi-asset funds?

    6. By how much does Mr Parsons say the value of £10,000 invested in cash 10 years ago would have lagged behind the rate of inflation?

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