Multi-asset investments are nothing new, but the backdrop in which they operate is changing drastically. Macroeconomic upheaval and different relationships between how various asset classes behave are requiring investors to adopt different outlooks, signifying a departure from static strategies.
Keith Balmer is a portfolio manager at Columbia Threadneedle Investments and part of the team that oversees the group's CT Universal MAP range, or Universal MAP range. He says the Universal MAP range is designed to be nimble, given the environment it launched into was drastically changing.
"We started the Universal range in 2017 with the view that you wanted to be active in the markets," recalls Balmer. "And the markets we've experienced since then have proved this to be a profitable decision. If you set your asset allocation back in 2010, post the global financial crisis, it didn't really make too much difference [where you invested] and that would give you a great return."
This reflects the fact that accommodative monetary policy had for years been supporting markets with quantitative easing, which was beneficial across many different asset classes. Over time, investors began to better understand the long-term effects of this, with the COVID-19 pandemic and heightened inflation then complicating things. While Balmer says a "simple" strategy would have worked before, the greater choice a multi-asset portfolio affords is now warranted.
"When things change in markets, you've got to be able to understand is it time to stick or twist?" asked Balmer. "It's about having more optionality. A lot of funds you see out there are, I would suggest, investing with one hand tied behind their back because they've ruled out, either stock selection or active asset allocation, limiting their optionality.
Read the article in our Focus guide with Columbia Threadneedle Investments.
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