HEAD-TO-HEAD: JP Morgan vs Standard Life Investments

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Randal Goldsmith, Morningstar

Global macro allocation

Multi-asset funds can, in principle, act as a ready-made portfolio. They combine several asset classes into one product, providing exposure to equities, bonds and other asset classes.

Multi-asset funds have had highest inflows of all fund categories in Hong Kong since the return of volatility at the beginning of the year.

Globally, mixed asset funds gathered around $62bn net inflows in the first four months of the year, according to Morningstar, compared to $209bn net inflows in equity funds and $124bn in fixed income funds.

Investors’ who choose mixed-asset funds are likely aiming to hedge the risk of a further market correction, while retaining some exposure to all asset classes within the fund.

Mixed-asset funds available for sale in Hong Kong collectively had AUM of $145.7bn at the end of last month, according to FE data.

Other than traditional long-only mixed-asset funds investing in equities and bonds, managers also have been launching products investing in unconventional asset classes. Last month, Blackrock rolled out a fund that invests in assets such as covered calls, mortgage-backed securities and collateralised loans in the US, as well as floating rate loans and REITs globally. The fund targets investors who want to diversify away from traditional income investments.

Against this backdrop, FSA talks to Randal Goldsmith, London-based senior fund analyst at Morningstar, who provides a comparative analysis of two macro multi-asset funds. They are the JP Morgan Global Macro Opportunities Fund and the Standard Life Investments Global Absolute Return Strategies Fund.

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