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Checking in on the multi-asset promise

Multi-asset funds pledge to mitigate volatility. How have they fared this year as global markets tanked?

The start to 2016 has been resoundingly negative for global markets. Year-to-date, key indices are all down, led by Japan:


Because multi-asset funds are able to diversify investments across a range of instruments, strategies, sectors and regions, the claim is that they can cushion shocks that take down products investing in a single asset class.

However, of 417 multi asset funds available for sale in Hong Kong or Singapore, year-to-date only 21 or about 5% are in positive territory. The past six weeks or so is a short time horizon. But volatile time periods are the testing periods for multi asset funds. Here are the top five performers:


Out of the top five, only two – JP Morgan and Schroders — have a long enough track record for five-year performance. Over the trailing five years, the two have delivered on the value proposition of the asset class: to show a positive return but retain low volatility.


A further filter is outperformance over the trailing five years. While both funds are in positive territory during this period, the Schroders product underperformed (35.7%) versus the sector (45%), according to FE Advisory data.

The JP Morgan fund outperformed the sector 39.5% vs 11%, respectively.

Part of the Mark Allen Group.