Multi-asset management: a bespoke approach

In this article, Rozenn Le Cainec, Co-Head of Multi Assets, Rates & Credit Specialties at LBP AM, explains why multi-asset strategies are emerging as a cornerstone of wealth management.

In an environment marked by persistent uncertainty and increasingly diversified expectations among investors, multi-asset funds play an increasingly important role in wealth management. Open-ended funds or segregated mandates, these solutions offer flexible frameworks designed to reconcile performance objectives, risk management, and capital preservation, while adapting to multiple investment constraints and préférences

Strategies designed for a wide range of market environments

In an era where matching risk profile with investment proposal is paramount, the flexibility of multi-asset portfolios allows adaptation to various market configurations and expectations. Risk management has become a critical component of wealth management strategies: through dynamic allocation and diversified sources of return, multi-asset strategies aim to enhance portfolio resilience while continuing to seize performance opportunities across cycles. 

Multi-asset management also allows for a wide variety of wealth management objectives: the range of solutions has expanded with the advent of flexible funds over the past 10 years, the integration of downside risk management, and the creation of vehicles providing access, in particular, to the range of private markets - unlisted debt and equities - or to targeted derivative instruments, which are more efficient in terms of financial risk hedging.

By combining several areas of expertise and a multitude of tools, asset managers can tailor risk budgets and portfolio construction techniques to meet each investor's requirements. Multi-asset management provides access to investment vehicles managed by experts in asset allocation, emphasizing the agility of the allocation within the funds, and offers multiple risk profiles: each allocation is a combination of assets whose risk levels may become uncorrelated, thus allowing to achieve a specific overall volatility level.

What are the key benefits of multi-asset management?

The ability to diversify investments across multiple asset classes – equities, bonds, real assets or unlisted assets – multiplies the sources of performance, and can help to better absorb market shocks. Another advantage: the ability of flexible allocation funds to seek to reduce downside risk in adverse market phases, or to sell and be absent from an asset class with expected negative prospects.