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New CAMRADATA whitepaper explores how effective Multi Asset investing solutions may be post pandemic

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Despite a stormy ride pre pandemic, Multi Asset strategies could offer investors attractive returns and diversification as the world moves beyond Covid-19. 

CAMRADATA’s latest whitepaper, Redefining Multi Asset Solutions considers if these strategies can meet their objectives as the global economy rebuilds and what steps will reinforce their appeal to fund managers.
 
The whitepaper includes insight from guests, who attended a virtual roundtable hosted by CAMRADATA in April, from firms including QMA Wadhwani LLP, Waverton Investment Management, Aon, bfinance, Cardano, Cartwright and Spence.
 
The report highlights that despite huge monetary and fiscal interventions from Governments and centrals banks to preserve investor confidence and nurture business recovery; investors are still faced with equity volatility, near-zero interest rates and low yields on government bonds.
 
The big question is how investors will manage their asset allocation and fund selection in a post-Covid economy. Multi-asset funds could be a solution, as they aim to deliver attractive returns across a wide range of market conditions, employing an asset mix that protects against a sharp rise in correlation under stress conditions.
 
Sean Thompson, Managing Director, CAMRADATA, says: “An attraction of multi-asset investing is that it enables timely rebalancing of allocations between asset classes, while providing integrated risk oversight that spans the full multi-asset portfolio.
 
“The aim is to deliver portfolio diversification, while offering flexibility to tailor investment outcomes to the needs of the investor, whether this is growth, income, risk minimisation or absolute return. But, multi-asset strategies had a difficult three or four years prior to the pandemic which may influence decisions.
 
“Data however from the CAMRADATA universe of multi-asset funds for the period prior to the Covid-19 shock indicates that many of them were broadly delivering to their mandate. Our panel considers if the timing is right for multi-asset strategies and how fund managers adapt them to thrive in a post-Covid environment.”
 
The CAMRADATA roundtable began by exploring which organisations had felt the need to redefine or re-categorise multi-asset, with panellists outlining their approach. The discussion moved on to strategies that bridge the gap between beta and alpha.
 
The panel’s fund selectors were then asked whether they look at multi-asset strategies at the fund level or lower down at the individual funds’ stock exposures, to get a sense of the evaluation process of correlations and beta.
 
The conversation turned next to the argument for a traditional 60/40 equity/bond allocation, and protective strategies, before finishing on the issues of timing, alpha creation and varying beta exposure.
 

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