Multi-asset 

Guide to risk and return in multi-asset

  • Identify whether multi-asset funds are using a more modern approach to diversification and how it can be measured.
  • Describe how advisers can evaluate risk and volatility in multi-asset, and the importance of clients' time horizons.
  • List how multi-asset funds can meet income requirements.
CPD
Approx.60min
Guide to risk and return in multi-asset

Introduction

UK investors have been flocking to multi-asset funds in the past few months, if net retail sales figures from the Investment Association are anything to go by.

Net retail sales of Mixed Asset funds ended 2018 at £561m, falling slightly to £367m in the first month of 2019.

One of the reasons these types of funds have been attracting inflows is because of their perceived ability to spread risk across asset classes which, during times of political and economic uncertainty, may seem like a sensible option for many advisers' clients.

The low interest rate environment is another driver behind their increasing popularity, while other clients are using multi-asset income funds to help meet their retirement income needs.

But some advisers may be concerned that multi-asset funds are having to go further up the risk scale in order to meet these yield requirements.

The features in this guide will consider how advisers can measure 'true' diversification when it comes to choosing a multi-asset fund for clients. It will also look at how advisers can evaluate metrics such as risk and volatility when placing clients into a multi-asset solution and why it is important to do so.

Finally, the guide will look at why advisers need to establish their clients' investment time horizons and whether multi-asset funds can deliver income for clients.

This guide is worth an indicative 60 minutes of CPD.

Contributors to this guide: Mike Coop, head of multi asset portfolio management at Morningstar Investment Management Europe; Minesh Patel, chartered financial planner at EA Financial Solutions; Will Mcintosh-Whyte, assistant fund manager of the Rathbone Multi-Asset Portfolio Funds; David Coombs, fund manager of the Rathbone Multi-Asset Portfolio Funds; Guilhem Savry, head of global macro and dynamic asset allocation, cross asset solutions at Unigestion; Ben Seager-Scott, chief investment strategist at Tilney Group; Joshua Gerstler, financial planner and company director at The Orchard Practice; Kevin Doran, chief investment officer at AJ Bell; Verona Kenny, head of intermediary at Seven Investment Management; Investment Association; AJ Bell.

Ellie Duncan is features editor at FTAdviser and Financial Adviser

In this guide

CPD
Approx.60min

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. According to Mr Coombs, he has been adding to three traditional asset classes in his portfolios. Which of the below is the odd one out?

  2. Mr McIntosh-Whyte says risk is often hidden by several factors. Which of the below is not one of these?

  3. Mr Seager-Scott says: "Both volatility and drawdown are useful metrics for risk." True or false?

  4. Mr Coombs says that decumulation strategies can be more what?

  5. Which type of investment does Mr McIntosh-Whyte says he avoids in his portfolios?

  6. The search for yield has pushed investors to do what with the risk in their portfolios, according to Mr Savry?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Identify whether multi-asset funds are using a more modern approach to diversification and how it can be measured.
  • Describe how advisers can evaluate risk and volatility in multi-asset, and the importance of clients' time horizons.
  • List how multi-asset funds can meet income requirements.

I completed this CPD in

To bank your CPD please complete the form below.

Were the stated learning objectives met?

Why weren't they met?

What did you learn from undertaking this CPD exercise?

Why did you undertake this piece of learning?

Banked!

Congratulations, you have successfully completed and banked this piece of CPD

Already Banked!

You have already banked for this article.

To bank your CPD you must or

Register

One or more questions have been incorrectly answered,
 please review your answers and try again.

Please complete all the above text fields to bank your CPD.

More Investments CPDSee my completed CPDSee all CPD

Comments