“While no one can predict the future with any certainty, there are features of today’s investment environment that we see as becoming important drivers of future returns. These are our “inescapable investment truths”; a combination of global economic and disruptive forces that we believe will result in low growth, low inflation, low interest rates and low market returns compared to the last 10 years. The advent of Covid-19 has only served to reinforce these trends, creating a challenging backdrop for institutional investors looking to deliver on both return target and risk/volatility objectives,” Schroders fund managers shared in a recent Q&A session.
In the session, Ugo Montrucchio and Michael Devereux, both multi-asset portfolio managers at Schroders give their views about why not all multi-asset strategies are well suited to navigating our current uncertain and volatile environment, and a 60/40 approach may just not cut it anymore. “South African investors are no strangers to multi-asset investing. According to the Association for Investment and Savings South Africa (ASISA), just under half of the assets under management in collective investment schemes are held in SA multi-asset portfolios. But the term “multi-asset” encompasses a broad range of strategies and not all are well suited to navigating the uncertain and volatile environment we find ourselves in today,” Montrucchio reveals.
But what about a traditional balanced, 60/40 approach? According to Montrucchio and Devereax a more diversified, dynamic and active multi-asset approach than a traditional balanced fund to realise targeted returns at lower risk, is needed.
Click here to read more as well as their solution to how an investor can achieve this.