Investors turn to multi-asset funds

Posted: 26/04/2012

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Peter Bourne, Managing Director of Ashburton, believes that investor sentiment may have turned for the better since the start of 2012, despite the many uncertainties that remain. Nevertheless, Bourne is mindful that the first few months of last year dealt a similar hand, only for those gains to evaporate.

“While we know that markets do everything else but move in a straight line, there certainly seems to be more room for optimism than more of the same gloomy scenarios we have grown used to over the past couple of years.”

“What is perhaps not so clear for investors is in what geographies, which asset classes and where on the risk curve they should be investing; is it in the safer, developed markets like the US stock market, which has had a stellar performance recently, or in emerging markets, where lower and volatile returns can often belie the perceived risk-reward payoff?”

Bourne believes that when confronted by today's global world many investors are left wondering whether it is better to buy developing market profits through New York or Shanghai listed companies.

“Not surprisingly, investors are increasingly delegating these decisions to professional managers. Globally, multi asset sectors, under a variety of names such as managed, balanced and target return funds, continue to attract sizeable investment flows. Other than the complexity of the global asset allocation decision itself, ageing Western demographics have led a shift towards outcome-based investment, while a lack of yield and increased risk awareness among individuals and advisers have also built strong appetite for this product suite.”

Bourne considers that this trend resonates with Ashburton. “Since we began investing money on behalf of our clients, we have consistently applied the principles of diversification, risk management and active asset allocation across our evolving range of multi asset products. We constantly challenge ourselves to improve our investment process and leverage our philosophy; in recent years we have embraced the influence of behavioural theory on markets and investors to reduce the level of emotion in decision-making and more easily recognise opportunities.”

Ashburton is based in Jersey, with assets under management exceeding £1 billion, and is part of the FirstRand Group.

Its flagship multi-asset product is the Sterling Asset Management Fund, managed by Nick Lee. Over five years to March 31, 2012, the fund has returned +23.2% compared to the sector average growth of +9.6%, according to Morningstar.

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