Multi-Asset Solutions

Multi-asset strategies provide exposure to a diverse mix of asset classes – including stocks, bonds, cash, and alternatives – in a single investment portfolio.² Managers often target specific outcomes or goals such as a particular level of return, less volatility, less risk, income, or more diversification.

Diversification is one of the key benefits of multi-asset strategies. When a portfolio is exclusively invested in one asset class, it becomes vulnerable to downturns affecting that asset class. Multi-asset strategies seek to increase portfolio diversification by allocating investments among several classes. This may help reduce risk and volatility compared to single asset class options.

Risks of multi-asset strategies include market risk where all asset classes underperform, the risk of interest rate fluctuations impacting debt investments, credit risk from potential default by debt issuers, and liquidity risk if underlying investments are difficult to sell. Additional risks include expense ratios which can erode returns, derivatives risk from complex instruments used for hedging or growth, and currency risk from international investments.

Financial professionals may choose multi-asset strategies for their clients for a variety of reasons. Accessing multiple asset classes through one strategy can be more efficient, simpler, and more likely to avoid overlapping exposures than accessing the same collection of asset classes through separate investments.