What Is a Multi Asset Fund and Who Should Consider Investing in It?

multi asset fund fidelity

Just as in life, investing is a journey that evolves over time. But while some things change, certain principles remain the same.

One of those principles is not putting all your eggs in one basket. This way, if one basket drops, the other eggs will likely be OK.

Too many individuals today are not properly diversified, especially considering how difficult investing can be with the variety of asset classes available to them. One way to diversify effectively is by investing in a professionally-managed multi asset fund.


What is a multi asset fund?

While certain traditional investment products tend to focus on one type of asset class such as stocks or bonds, a multi asset fund invests in different assets in an effort to reduce investment risk and potentially yield a higher return.


Why should I invest in a multi asset fund?

By resisting the urge to put all your eggs in one basket and taking on too much risk, a multi asset fund provides an easy way to diversify and invest for the long-term through any market environment.

A true multi-asset fund will invest not only in traditional assets like stocks and bonds, but also in non-traditional assets. These are often known as “alternatives”, can cover property, commodities and even art, classic cars and wine. Increasingly, professional investors are considering things you might not have thought of – renewables, infrastructure, and aircraft leasing.


But which multi asset fund should I choose?

The Fidelity Funds Global Multi Asset Income Fund invests in a variety of asset classes, including alternative investments. These “alternatives” add to the diversification of the portfolio as they tend to be uncorrelated to traditional assets (i.e. their value tends to not rise and fall at the same time as other assets). The fund manager carefully choses them and blends them together, offering added value and often a good source of yield for investors.

Ultimately, in addition to providing access to the broad range of investment opportunities that present themselves to investors, one of the main benefits of a multi-asset fund is its relative stability. Multi asset funds tend to be less volatile than equities, which means their performance is likely to be less affected when unexpected events take place. Their appeal has been growing in recent years, with a recent report suggesting that more than US$1.2 trillion may flow into multi asset funds in the coming five years1. The stability they offer and the potential for attractive income are perhaps two key drivers of this demand.


So… which kind of investor am I?

As we grow older, our priorities change. Investing in products with a higher risk profile in the search for higher returns often change when our responsibilities go beyond ourselves. Our appetite for investing in high risk, high return financial products often declines as our responsibilities increase. Be sure to consult a financial advisor to determine your best path forward.


1Pensions & Investments, 12 December 2016

Interested in multi asset funds? Consider Fidelity’s Global Multi Asset Income Fund. Click here to find out more.

This article is brought to you in collaboration with FIL Investment Management (Singapore) Ltd.