Johanna Kyrklund revealed Schroders has rotated into alternatives in its multi-asset portfolios as she urged advisers to look "underneath the surface" of multi-asset funds.
Asked how multi-asset managers should be positioned given the economic cycle, Schroders' global head of multi-asset investments said: "We heavily emphasised equities last year.
"I think a lot of the juice has been squeezed out of that particular orange and we have been rotating into more alternative sources of return which have been performing quite well, even this year.
“So we would emphasise alternatives right now and I think later this year we expect probably to rotate back into bonds.”
She added: "Obviously, bond yields have been rising of late. There could be some interesting opportunities over 2018."
But she acknowledged alternatives as an asset class could mean something different to another multi-asset manager.
Ms Kyrklund said: "I think it is really important to understand the toolkit, particularly when you are looking at alternative assets.
"For example, there has been a lot of interest, of late, in alternative credit which could get quite illiquid in a more difficult market environment.
"So really understanding how much risk is underneath the surface I think is critical to assessing any multi-asset strategy."
The Investment Association's Mixed Investment sectors have continued to gather significant net retail sales.
In November 2017, the IA Mixed Investment 20 per cent to 60 per cent Shares sector took in £305m in net retail sales, making it the second best-selling sector in the month.
Ms Kyrklund suggested multi-asset funds had an important part to play in a client’s portfolio as a core allocation, supplemented with "high conviction views from the adviser".
For more on multi-asset, visit FTAdviser Talking Point.