Turmoil in global financial markets is making multi-sector fund more attractive for investors who are no longer willing to risk putting all their eggs in one basket, according to research by Standard Poor’s.
Multi-sector funds, which employ specialists to invest across several different asset classes, have long been a mainstay for retail investors looking for a diversified and low-cost way to make money.
But since the start of the global financial crisis (GFC), professional and more sophisticated investors is only likely to grow, according to SP Fund Services analyst Andrew Yap.
‘There is an increasing awareness and use of these funds by other larger and more sophisticated investors,’ he said in the report, published Friday.
The research found that growing volatility in global financial markets had made it harder for investors to choose between active fund managers, and so made multi-sector funds more attractive as they bring together several specialists in one product.
Increased scrutiny from regulators is also forcing fund managers to be more mindful of their investments as the advice they give to clients – favoring multi-sector funds that employ specialists in a particular asset classes.
For fund managers, the growing interest from sophisticated investors also means thaey must be more specific in defining what returns they offer and the associated risks, Mr. Yap said.
Per Olov Jansson
CEO Cardea International