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Multi-asset funds offer diversification through use of alternative instruments

Zavier Ong
Zavier Ong7/10/2017 08:00 AM GMT+08  • 6 min read
Multi-asset funds offer diversification through use of alternative instruments
SINGAPORE (July 10): Multi-asset funds have become increasingly popular in recent years, as fund houses attempt to offer investors more bang for their buck. These funds invest not only in equities and bonds, but also in a range of other asset classes such
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SINGAPORE (July 10): Multi-asset funds have become increasingly popular in recent years, as fund houses attempt to offer investors more bang for their buck. These funds invest not only in equities and bonds, but also in a range of other asset classes such as infrastructure projects, property, private equity and derivatives.

Do such funds have a place in investors’ portfolios? How are they useful? And are they more or less risky than traditional equity, bond or balanced funds?

Victor Wong, director of wealth management at Financial Alliance, thinks a multi-asset fund could serve as the foundation of an investor’s portfolio. “For investors who have a small investment amount or for someone who is not investment-savvy, a good multi-asset fund can be used as a core fund,” he says. This is because multi-asset fund managers can actively manage their positions by overweighting and underweighting asset classes or sectors according to different market conditions. “For investors who want a more income-orientated solution, a multi-asset income fund can also be a viable solution as fund managers can allocate monies to sectors with attractive yields on a risk-adjusted basis,” Wong adds.

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