Why You Should Invest in Multi-Asset Funds

Virtually all assets rallied following the financial crisis, but those value opportunities have now all but disappeared across many asset classes - multi-asset funds offer edge

J.P. Morgan Asset Management 18 September, 2014 | 4:48PM

Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, Talib Sheikh, from JP Morgan explains why he thinks a multi-asset portfolio is best placed to face the challenge of fully valued market.

A decade ago the basic concept of a multi-asset income fund was dramatically different. Multi-asset funds evolved from traditional balanced funds, a mix of equities and bonds. Back then, it was pretty much just the basic binary decision between stocks and bonds. How much did you hold of each asset class as a reflection of your macro view?  Fund managers were focused on timing the market through some combination of macro analysis and tactical models. Something they and the academic literature know is incredibly difficult to do.

However, in the last few years, multi-asset income funds have moved light years beyond this conversation. Today, it is all about managing an increasingly multi-dimensional and much expanded opportunity set. We would argue that evolution is precisely why multi-asset income funds will prove their value relative to other investment strategies in the immediate future.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

J.P. Morgan Asset Management  is the investment arm of JPMorgan Chase & Co. and it is one of the largest active asset managers in the world.

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