But it doesn’t always work in the short term. “It’s of course possible that our multi-asset managers all have the same asset allocation ideas as us at one point,” Aggelidis (pictured) admits.
“This happened for example in the run-up to the French and Dutch elections in spring, when we reduced equity risk in our portfolios. But it then turned out all our multi-asset managers did the same thing.”
Volatility control
Attitudes towards are as divergent between countries as they are between individual fund selectors. While professional investors in the Nordic countries and the Netherlands do not tend to invest in multi-asset funds, usage is widespread in countries such as Italy, Germany and Spain. Investors in these countries also tend to be rather risk-averse, and that’s not a coincidence.
Moreover, the conservative nature of Spanish investors is precisely the reason that they invest in multi-asset funds, explains Alejandro Allona, a multi-asset fund analyst at Inversis Gestion in Madrid. It’s the only way to get them move up the risk ladder a little bit.
“Most Spanish investors are conservative, and have been moving from 100% fixed income to, say, a 20% allocation to multi-asset funds in recent years. Because they are conservative, they don’t want to invest in equity funds directly because they find the volatility too high,” he explains.
“If the equity exposure comes via a multi-asset fund, volatility will be lower than for the equity fund, even though they will still have the same total portfolio exposure to equities. But this set-up makes investing in equities more palatable for clients.”
