In this paper, we share how multi-asset investing offers access to different asset classes, provides diversification, risk-adjusted returns, real-time risk insight and the ability to adjust portfolios for prevailing market conditions.
The aim of investing is to achieve financial goals. These financial goals may be a required level of income or desired level of savings at retirement. To meet these goals, investment decisions need to be based on return ambitions, risk appetite, and time horizon. The challenge is that financial markets are dynamic and experience both booms and busts. Most investors cannot rely on ‘long-run average market returns’ as they don’t have an infinite time horizon. To achieve investment success over a specified horizon, asset allocation decisions must be made to address the delicate balance between delivering the return objective whilst not taking excessive market risk.
Multi-asset investing offers the ability to invest across an entire universe of asset classes globally, including equities, fixed income, commodities, and cash. This can provide a high degree of diversification and a better risk-adjusted return than a single asset class option, such as fixed income or equities in isolation. Additionally, a multi-asset approach offers real-time risk insight and the ability to adjust portfolio positions for prevailing market conditions.