Demand for multi-asset funds set to increase

Demand for multi-asset funds set to increase

More than two thirds of advisers forecast the high demand for smoothed multi-asset investments will continue for at least another two years, according to research from Prudential.

A poll of 109 IFAs by the UK's largest provider of with profits funds found 37 per cent expect the pace of expansion in the sector to speed up, while 33 per cent forecast the sector will maintain the current pace of expansion.

Just 19 per cent of advisers expect the demand for smoothed multi-asset to stall or decline over the next few years.

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The survey also recorded the views of IFA that were less than happy with such funds.

Objections to multi-asset funds included unhappiness at transparency, the sector's reputation, a lack of choice of with profits providers or a preference to make their own asset allocation decisions.

Reacting to the research, Helen Howcroft, director at Equanimity IFA, said multi-asset funds had seen exceptional growth but wondered how much of this was due to market timing flattering the returns of such funds.

She expressed concern at how well the funds would perform in the turbulent geo-political climate of the next year.

Ms Howcroft said: "With all of these types of funds they generally become fads and it will be interesting to see whether these funds are here to stay.

"We could be looking at turbulent times ahead this year."