multi-asset What is a Multi-Asset Fund?

In today’s dynamic financial world, smart investing is not just about chasing the highest returns — it’s about building a resilient, diversified portfolio that has the potential to weather market volatility and support your long-term goals. That’s where multi-asset investing comes in.

Whether you're just starting out your investment journey or looking to fine-tune your investment strategy, this article will walk you through the essentials of multi-asset funds, including:

• What is a multi-asst fund?
• Types of multi-asset funds
• Why financial goals matter?
• Why are multi-asset funds relevant today?
• Potential drawbacks of multi-asset funds

For technical terms, please refer to our Glossary

What is a multi-asset fund?

A multi-asset fund is like a ‘one-stop shop’ for investors. It combines a variety of asset classes — such as stocks, bonds, real estate, and commodities — into a single, professionally managed portfolio. This built-in diversification can help reduce risk and may help smooth out returns over time.

Not all multi-asset funds will necessarily contain all of these asset classes, but here’s an example of what a multi-asset fund might include and why:

• Equities (stocks) – for long-term growth and capital appreciation
• Fixed income (bonds) – for steady income and portfolio stability
• Real estate – as a hedge (offset) against inflation and a source of long-term value
• Commodities – such as gold or oil, to capitalise on commodity supercycles (prolonged periods of price increases/ decreases) or supply shocks
• Alternative investments – such as private equity or hedge funds (which may use more complex strategies), for added diversification.
• Cash or money market instruments – for liquidity and potential capital preservation

By blending these different asset types, multi-asset funds aim to deliver more consistent returns while managing risk. Multi-asset funds can provide a convenient, hands-off investment option for many types of investors seeking exposure to different asset types without having to manage the asset mix themselves.

Types of multi-asset funds

Multi-asset funds aren’t ‘one-size-fits-all’, however. We have grouped them into four of the most common types to illustrate how they can be designed around different investment goals, risk appetites, and life stages:

1. Balanced funds

• What they are: A classic mix of stocks and bonds — often around a 60/40 split.
• May suit: Investors seeking a balance between growth and stability.
• Life-stage example: May suit mid-career professionals with moderate risk tolerance.

2. Growth-oriented funds

• What they are: Often heavily tilted toward equities in seeking to maximise long-term returns.
• May suit: Investors with a higher risk appetite and a long investment horizon.
• Life-stage example: Could be ideal for younger investors in their 20s or 30s who may be more comfortable riding out market ups and downs.

3. Income-oriented funds

• What they are: Focused on generating regular income through bonds and dividend-paying stocks.
• May suit: Conservative investors or those looking for steady cash flow.
• Life-stage example: Could be a solid choice for retirees or those approaching retirement.

4. Target-date funds

• What they are: Designed around a specific retirement or investment date, these funds gradually shift to a more conservative asset mix over time.
• May suit: Long-term investors who prefer a “set-it-and-forget-it” approach.
• Life-stage example: Could be ideal for anyone saving for retirement or a major future goal.

Why financial goals matter?

Selecting a suitable multi-asset fund starts with understanding your own financial goals and risk tolerance. Consider the following:

• What is my primary financial goal — growth, income, or a combination of both?
• What is my investment time horizon — short, medium, or long term?
• How much risk am I comfortable taking?

Your answers will help narrow down the type of multi-asset fund that best fits your needs and life stage.

Why are multi-asset funds relevant today?

In a world of market uncertainty, multi-asset investing offers a potentially resilient and adaptive investment solution. Key benefits include:

• Risk management: Diversification across asset classes can help cushion against market downturns.
• Flexibility: These funds can support evolving life goals — whether it’s buying a home, funding education, or retiring comfortably.
• Long-term planning: A balanced mix of growth and income can support financial security over time, especially as life expectancy increases.
• Convenience: Access to a diversified portfolio through a single investment.

Potential drawbacks of multi-asset funds

While multi-asset funds offer many benefits, it’s important to be aware of potential limitations:

• Complexity and lack of transparency: The mix of assets can make it difficult to fully understand what you are invested in
• Higher fees: These funds may charge management fees on top of the costs of their underlying investments
• Asset allocation risk: The fund manager’s decisions on asset mix are critical — poor timing or misjudged shifts in that mix can impact their performance

Despite their potential drawbacks, multi-asset funds remain a compelling option for many investors. Their ability to blend growth, income, and potential resilience into a single, professionally managed solution makes them especially valuable in today’s uncertain markets. For investors seeking diversification, simplicity, and long-term resilience, multi-asset funds may serve as a core foundation in a well-rounded investment strategy.