Multi Asset Investing?
Typically, investors opt for multi asset investing options to
manipulate their exposure to market risks. Regardless,
investment is a tricky avenue and requires individuals to be
well-versed with several aspects of risk and reward. This is why
it is imperative that individuals become familiar with the
concept of multi-asset investing, and align their resources
Multi-Asset Investing – In Brief:
Ideally, multi-asset investing is concerned with more than one
asset class. As a result, it helps investors to create a diverse
group or portfolio, in general. It is often described as a
pattern of investing across an array of markets and assets like
– cash, equity, and bonds.
Since it deals with multiple asset classes, it prevents
individuals from investing all their resources into one
investment or asset group. The idea behind this type of
investment is to provide risk-adjusted returns and spread out
Generally, investors are advised to build suitable strategies to
make the most of targeted investment tools. Also, multi-asset
investments require investors to be well-versed with the concept
of diversification, so that they can maximise their benefits.
This table below highlights the main asset classes, mostly used
in multi-asset investments –
They are popularly known as stocks or shares. These are
securities that manifest ownership interest in a listed
company. In a multi-asset portfolio, they are the most
rewarding asset class.
Cash is the most liquid asset class that accompanies
almost negligible risks.
They are also known as bonds and are issued by companies
or governments. They prove useful in minimising
This asset class comprises investment avenues that do
not necessarily come under traditional asset classes
like – bonds, cash and equities. Examples are
– real estate, hedge funds, etc.
However, investors who intend to park their money into an
alternative investment platform that accompanies minimal risks
and provides immediate returns, may choose to purchase invoices
of blue-chip companies. Typically, they can buy the invoices of
such credible companies and widen their investment horizon
How Does Multi-Asset Investing Work?
In general, multi-asset investing works to diversify an
individual’s investment portfolio. It is typically
achieved by allocating resources throughout different asset
Generally, individuals practice
multi-asset investing through either of these
Tactical Asset Allocation
Such a multi-asset investment strategy is
mostly built around changing market conditions. In other words,
based on prevailing conditions, investors align or modify their
portfolio’s exposure in the market.
- Strategic Asset Allocation
Multi-asset strategy-based allocation tends to focus on specific
investment outcomes in terms of risk and reward. Typically, this
approach follows the performance of a given asset class over the
years. Also, investment managers’ often use scientific
modelling to ascertain the best combination of different asset
groups to receive the desired outcome.
Benefits Of Multi-Asset Investing
Strategic approach and targeted allocations are key highlights
of multi-asset investing. Collectively, they
help investors to fine-tune the market risks and avail
attractive growth opportunities.
Other than that, these are among the most prominent benefits of
multi-asset investment –
- Offers Risk-Adjusted Returns
Like discussed, multi-asset investing allows
investors to expose their investment portfolio to a broad range
of quality assets and sectors. Also, the same is achieved
through strategic and flexible allocation, which helps investors
to generate returns that help to cushion the impact of
Above all, the funds involved in
multi asset investment are meticulously
diversified across traditional and non-traditional assets, which
helps generate balanced returns over time.
Provides Goal-Based And Measurable Returns
The performance of multi-asset investing is not measured against
traditional benchmarks. Instead, investors analyse the
performance of multi-asset investment options in terms of
returns. It is because unlike traditional asset classes,
multi-asset funds are goal-driven and target a specific outcome.
Generally, multi-asset funds are managed by efficient
professionals who are well-versed in the concept of
diversification and market analytics. Also, these funds undergo
calculated exposure to a broad investment spectrum, including
– market capitalisation. Collectively, these work in
favour of multi-asset funds and help them to adapt to the
changing market quickly.
Multi-asset investment funds are allocated
without triggering any capital gains until
to sell them. As a result, investors are also able to defer
their capital gain tax for a significant time.
It must be noted that multi-asset investing has
its share of drawbacks. For example, diversification does not
reflect investors’ risks and return preferences. Other
than that, investors often fail to allocate resources optimally,
across varied asset classes, and that prevents them from
generating substantial returns. Hence, it would help if you
weigh in all these factors before parking your money in
multi-asset based avenues.