Multi asset funds have embedded biases. Why we need to know them…

‘Value investors do not believe stock market behave efficiently’

clock • 5 min read

If you are an adviser or paraplanner who recommends multi asset funds – whether this is in the form of an outsourced, or in-house centralised investment service, or whether you recommend multi asset funds generally – you need to know about their embedded biases, Paul Ilott writes…

Embedded biases are effectively the DNA of a multi-asset fund, and investment style is a key DNA building block. Style can make a tremendous difference to return patterns because individual styles perform differently throughout the economic cycle and under a range of market scenarios. Identifying style(s) can help us understand the likely market conditions that might benefit or hinder a portfolio's performance journey relative to peers. We might be more tolerant of periods of tepid performance when the prevailing market backdrop isn't conducive to the portfolio manager's style. Conver...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

Partner Insight: AI and demographics - the economic tug of war

Partner Insight: AI and demographics - the economic tug of war

The economic future is unlikely to look like the recent past. Artificial intelligence or demographics will drive change.

Joe Davis, Chief Economist and Head of Investment Strategy Group, Vanguard
clock 16 July 2024 • 6 min read
Scotland Investment Roadshow 2024: Join PA in a city near you!

Scotland Investment Roadshow 2024: Join PA in a city near you!

Join us in Edinburgh or Glasgow this September

Professional Adviser
clock 15 July 2024 • 1 min read
PA Awards 2024: Canada Life AM on winning Best High Income Fund

PA Awards 2024: Canada Life AM on winning Best High Income Fund

A look at how the financial services firm has risen to the top

Professional Adviser
clock 12 July 2024 • 4 min read