Multi-asset: tips on matching funds to clients' risk tolerances

Multi-asset investing is a highly fashionable concept first introduced by Harry Markowitz in the 1950s within modern portfolio theory (MPT), and later developed by Merton Miller and William Sharpe into the capital asset pricing model (CAPM). In simple terms, the theory relates to the proverb: “Don’t put all your eggs in one basket”. With less than six months to go, the Retail Distribution Review (RDR) is shaping investor appetite for multi-asset strategies. This is in part due to the latest consultation paper, titled Assessing Suitability, where the Financial Services Authority (FS...