Our environment is changing. Government bond yields are at record lows and the global financial crisis has altered the dynamics of markets. Investors are searching for yield and have become more risk-aware. As always, the backbone of a strong strategy is a good investment team with a proven process, demonstrated skill and prudent risk management. Next to this however, new innovative alpha sources and flexibility in fund design are becoming more important than ever. Multi-asset managers with the right investment approach might currently be best positioned to meet clients’ objectives in this environment.
Jan Kvapil is portfolio specialist, multi-asset and Valentijn van Nieuwenhuijzen is head of multi-asset boutique
Key points
Many multi-asset funds are flexible enough to enable their managers to enhance the returns even beyond what can be achieved by the first top-down asset allocation decision.
Well-managed flexible multi-asset strategies can provide attractive returns while running a risk level comparable to that of a diversified bond fund.
Markets now appear to be gripped by even more herd-like behavior and more frequent disruptions.
