PA ANALYSIS: The winners and losers in the multi-asset revolution

While commentators are quick to praise innovation within the funds space, is there a case to say that the industry is still edging towards conservatism and risk aversion?

Portfolio Adviser


Speaking at this week’s Lipper Alpha Expert Forum, the firm’s EMEA research head Detlef Glow emphasised the abundance of innovation among the likes of ‘all weather’ bond funds, UCITS income strategies, absolute return and smart beta.

That’s a fair point, with many variations of these strategies having made their bow in the retail space within the past year or so.

Certainly, there is more depth in that universe compared to 10, or even five, years ago.

But, what does it really tell us when the best-selling ‘asset class’ of this year is predicted to be, well, mixed asset?

Lipper’s fund flows data for 2015 has multi-asset at 31% of total sales across Europe, followed by alternatives at 25%.

Multi-asset and absolute return funds it seems will dominate for some time yet. Why? The potential for capital protection, not growth, must have a lot to do with it. Are investors really pushing to make money, or just scared about losing what they already have?

Perhaps that’s oversimplifying things, though the message coming from fund groups over the past five years has certainly been of a different tone from bull markets of old.

Aviva Investors is a good case in point, with a UK retail funds business built not on single-strategy funds, but rather around its targeted multi-asset/multi-strategy AIMS funds and its volatility managed range.

The business has recently been shaped by CEO Euan Munro – previously an architect of Standard Life Investors’ incredibly popular GARS product – who sees AIMS very much as the “shop window” into Aviva’s offering.

“We want to be recognised as a global leader in outcome-oriented investing,” he told me.

“The critical client needs in my view are just wanting to make good sustainable returns, good sustainable income or they want beat inflation or liabilities.”

As with any service industry, the customer is always right, though I’d question how much pressure fund houses are now putting on intermediaries, the professionals who are supposed to determine risk profiles in the first place.


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