In the second of a new series on embedded biases in multi-asset funds, Paul Ilott, managing director at Scopic Research, takes a closer look at why it is important for advisers to consider different volatility parameters...
If you are an adviser or paraplanner who recommends multi-asset funds as part of your investment proposition to clients - whether this is in the form of an outsourced or in-house centralised investment service, or whether you simply recommend multi-asset funds generally - then you need to know about embedded biases in multi-asset funds. This is because they have a bearing on suitability, understanding the likely investment journey, and monitoring performance. Intended outcomes are one form of embedded bias, and when considering investment outcomes, volatility parameters can sometimes...
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