Institutional investors seen flocking to multi-asset funds in the search for yield

Valentijn van Nieuwenhuijzen -

65 per cent of investors expect multi-asset fund exposure to grow in the next three years

Nearly two thirds (65%) of institutional investors believe that their peers’ exposure to multi-asset funds will increase over the next three years as the search for value and yield intensifies*.

NN Investment Partners’ survey of institutional investment managers revealed that one in seven (14%) expected investors’ exposure to increase ”dramatically. Another 29% said exposure would not change and 2% expected exposure to decrease in the same period.

When asked about deployment of multi-asset strategies, 45% of the respondents said multi-asset strategies should primarily be used as the core of a portfolio. That compares with 16% who said multi-asset strategies should be used as an alternative allocation to diversify portfolios, 15% who see them as a “satellite” that adds alpha to a portfolio and 14% who view multi-asset as a complement to proprietary portfolios managed in-house. Other applications cited included: alternatives (16%), satellite (15%) and a complement to proprietary multi-asset portfolios managed in-house (14%).

Financial markets have become increasingly integrated and complex as a result of globalisation. This has led to a greater and swifter circulation of information, meaning markets react much more quickly and in more complex ways than ever before. Faced with such challenges, it is unsurprising that investors would rather delegate decisions to multi-asset teams that have the technology and experience needed to collate and process this mass of information and act quickly when opportunities and threats present themselves.

Investors’ strong preference for multi-asset funds is underpinned by 75% of respondents who view global multi-asset strategies as a good investment that adds value, including 14% who ‘strongly agree’ with this viewpoint. Only 4% disagree.

Valentijn van Nieuwenhuijzen – Head of Strategy, Multi-Asset – NN Investment Partners