Nearly two thirds (65 per cent) 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 per cent) expected investors’ exposure to increase ”dramatically. Another 29 per cent said exposure would not change and 2 per cent expected exposure to decrease in the same period.
When asked about deployment of multi-asset strategies, 45 per cent of the respondents said multi-asset strategies should primarily be used as the core of a portfolio. That compares with 16 per cent who said multi-asset strategies should be used as an alternative allocation to diversify portfolios, 15 per cent who see them as a “satellite” that adds alpha to a portfolio and 14 per cent who view multi-asset as a complement to proprietary portfolios managed in-house. Other applications cited included: alternatives (16 per cent), satellite (15 per cent) and a complement to proprietary multi-asset portfolios managed in-house (14 per cent).
Valentijn van Nieuwenhuijzen (pictured), Head of Strategy, Multi-Asset at NN Investment Partners, says: “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 per cent of respondents who view global multi-asset strategies as a good investment that adds value, including 14 per cent who ‘strongly agree’ with this viewpoint. Only 4 per cent disagree.
