Talking Point 

Multi-asset funds 'only need reviewing three times a year'

Multi-asset funds 'only need reviewing three times a year'

Advisers should review their multi-asset funds in client portfolios a few times a year and no more, according to FundCalibre’s Tony Yousefian.

He suggested advisers needed to understand the objectives, goals and associated risks of any multi-asset funds they were using in client portfolios but reiterated “you are choosing multi-asset for a reason - so a professional can do the asset allocation monitoring and changing for you”.

For this reason, Mr Yousefian, who is senior research analyst at fund data firm FundCalibre, urged advisers to check what the multi-asset manager is invested in “a few times a year” to “make sure it is doing what you expect and meeting your clients' goals, but no more”.

He explained how a multi-asset fund might fit into a wider portfolio.

“Once you have chosen the core, you can then let the fund manager do the job of changing asset allocation for you and you can then focus on adding some satellite investments to your clients' portfolios as and when you think appropriate – allocating smaller amounts to sectors, countries or themes that you and your client are excited about or have conviction in.”

Jason Hollands, a managing director at Tilney, suggested the onus was also on managers to communicate any portfolio changes.

He said it was important for advisers to be “well informed by managers on how the funds are being managed and alerted of any major developments in the strategy or holdings so that they are suitability empowered when their clients discuss their investments”.

Mixed Asset funds brought in net retail sales of £13.5bn over 2017, the Investment Association reported earlier this month, boosted by their highest net retail monthly inflow ever in December at £1.7bn.

Mr Hollands commented: “As products which now represent the bedrock of many an adviser’s investment proposition, there is a wide range of choice available from both asset managers and discretionary investment managers.”

The latest FTAdviser Talking Point scrollable report ‘How to make the most of multi-asset’ takes a closer look at how the strategies fit into a wider portfolio of investments and why the macroeconomic environment is driving interest in the asset class.

Click here to read the scrollable report and earn 30 minutes of CPD.

eleanor.duncan@ft.com

Comments