These Multi-Assets Funds Want Your Cash, But How do They Compare?

In January Morningstar initiated coverage of BlackRock's MyMap fund range, so how does it compare in a hotly-contested space?

Ollie Smith 10 May, 2023 | 9:33AM
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Ollie Smith: Now Morningstar's fund research team has the tricky task of deciding which fund strategies are worthy of Morningstar analyst coverage. Here to discuss one such strategy, which earned coverage in January this year, is Senior Manager Research Analyst, Tom Mills, who joins me now.

Tom, thanks for your time. Why did BlackRock's MyMap fund strategy range earn Morningstar coverage and what does it do?

Tom Mills: So, we picked up coverage of the MyMap range earlier this year and awarded it a Silver rating for the clean share classes. What it does is it provides active asset allocation at a low cost. So, this is a range of four multi-asset funds that each have a different risk target and what that enables is for each fund to be suitable for a different client risk profile.

OS: Sure. And it's a sort of close competitor of L&G's own range. So, how do they differ in terms of approach and investment holdings?

TM: Yeah. So, the range that you mentioned is L&G Multi-Index, which is another multi-asset range of risk targeted funds. This one has five different risk levels. There's similarities in the fact that they both offer active asset allocation and use passive holdings. L&G is primarily passive. It does use a little bit of active management in areas like direct property, for example, and in some fixed income sectors. Both strategies have some alternatives allocation. So, BlackRock, for example, has gold and commodities and quite a small allocation to alts, whereas the L&G Multi-Index funds have a little bit more in alternatives, and they have other elements in the alternative sleeve, including direct property, for example, which I mentioned. But essentially, they are similar in the sense that they provide that dynamic asset allocation to investors at low cost using primarily passive underlying building blocks.

OS: Cool. And it would be remiss not to mention the big brand in this space, which is Vanguard and its LifeStrategy range. How does LifeStrategy compare to those two offerings?

TM: So, the main difference is the fact that the Vanguard LifeStrategy range keeps that proportion between equities and bonds fixed, whereas the MyMap and the L&G Multi-Index funds, they use dynamic asset allocation. They will shift their asset allocation in order to meet their risk objectives. So, they have a long-term asset allocation, but there's also a medium-term dynamic element there, and they're focused on meeting their risk targets.

OS: Cool. Tom, thanks so much. For more on fund research and Tom's work, check out where you can read our regular fund strategy updates. Until next time, I've been Ollie Smith for Morningstar.

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Ollie Smith

Ollie Smith  is editor of Morningstar UK

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