We asked financial advisers what they thought of multi-asset funds and how they were using them in portfolios.
London-based chartered financial planner Minesh Patel has worked in financial services for more than 20 years. Since 2010, multi-asset funds have been at the heart of his investment proposition. 'They're a very reliable and effective way to manage my clients' assets', he said.
The EA Financial solutions director belies a blend of active and passive funds provide clients with global diversification in the current uncertain climate, while keeping costs for the overall portfolio relatively low. 'I use the Vanguard LifeStratergy multi-asset portfolio, which is very widely used in the market. Its extremely cost effective', he said.
Then I'll use a discretionary fund manager portfolio to get the equity blend I need in line with the clients attitude to risk. 'I haven't taken a view on whether active or passive is going to be more effective as an investment strategy. Passive works extremely well in a situation where markets are rising naturally, but over the past two years, we've seen markets are moving sideways over a longer period. And for example, active funds that focus on dividend strategies are important in such an environment'.
For Patel, one of the advantages of his strategies is the limited exposure to UK assets, which has helped assuage client concerns with Brexit looming. 'Most of the questions I've been asked are regarding what percentage of my portfolio is formed of UK assets' he said. 'But I've always believed in global diversification, and had you been UK - centric for the last 10 years, your performance would be relatively inferior to a globally diversified portfolio. One of th reasons I like Vanguard is that equities are allocated by the size of the market, so it has a 26% exposure to the US market, which since 2008 has been absolutely stellar.'