Alex Farlow: The dangers of blending multi-asset funds

Multi-asset funds offer investors the opportunity to outsource asset allocation decisions, which can be very advantageous for those that do not have the time or resources to make those decisions themselves. Given that the majority of a portfolio's return and volatility on an absolute basis are likely to be driven by their asset allocation, these decisions are crucial to meeting a client's investment objectives. A common reason advisers will hold multiple multi-asset funds within a client portfolio is for diversification purposes, however cost and a reduction in manager specific risk are ...