M&G is the latest to spruce up its multi-asset capabilities and, like Investec before it, the asset manager has made a sensible decision to realign its range to suit different needs across the risk spectrum.
Groups will be hoping that their new multi-asset funds take off in the same way that multi-manager rose to prominence a decade or so ago – though, incidentally this was an arena which M&G has never been keen to enter.
Today, more so than 10 years ago, there is a far greater emphasis on cost – from both investors, and the regulator – and fund managers therefore will be under more pressure to ensure they are delivering value with their asset allocation decisions.
New competition
In a way, wealth managers and discretionaries are in direct competition with this new breed of multi-asset fund, though they may have more room for manoeuvre in terms of how they meet client objectives. Benchmarking against APCIMs indices puts wealth managers in esteemed company (their peers) while the IMA managed sectors are, at present, more of a hotchpotch of very different funds with very different objectives.
The most successful and celebrated multi-asset funds will not necessarily be the ones which deliver the best returns but which offer the most consistent strong-performance. That’s why it is vital that groups are crystal clear on their objectives and channels for dialogue with investors remain open.
Out of date
It will be interesting to see how transparent groups intend to be on their funds’ holdings. In this technological age, is it really acceptable for a fund manager to only communicate with investors through a monthly fact sheet that is already out of date by the time it is published? Multi-asset has an opportunity to take the lead here, particularly as most intermediaries are more than welcome to take calls from their clients whenever convenient.
M&G’s multi-asset team has an impressive enough track record having built up their reputation on the Prudential life fund, and I’m sure other groups too have endeavoured to pick the right personnel for their funds. The real challenge is maintaining a good reputation when markets go south.
