For one thing, when market valuations across various asset classes start to look stretched, investing in multi-asset funds is one way of reducing concentrated risk, according to Karen Tan, director and head of global wealth solutions in Asia-Pacific at Deutsche Asset and Wealth Management.
Moreover, market volatility has been rising, and multi-asset products help to smooth performance during such periods.
With this as the backdrop, Fund Selector Asia takes a look at the BlackRock Global Allocation Fund and the Schroders Global Multi-Asset Income Fund.
The BlackRock fund has been in inception since January 1997, while the Schroders product recently reached its three-year milestone last month.
Taking into consideration the longer history, the BlackRock fund is much larger in size with $24bn in assets under management (on 30 April). The Schroders vehicle had $6.7bn in AUM.
Both the BlackRock and Schroders fund invest in global equity and income securities and both funds manage their currency exposure actively. However, unlike the BlackRock fund, the Schroders vehicle targets a 5% yield per year, according to its factsheet.
Due to their different investment objectives, the portfolio management style also differs.
Luke Ng, vice president at FE Advisory Asia, provides a comparative analysis.
Investment strategy review
“The managers (Dennis Stattman, Aldo Roldan and Dan Chamby) of the BlackRock fund attempt to add value for investors by capturing capital appreciation, dividend yield and interest paying opportunities,” Ng said.
The fund holds exposure to around 700 securities, he said.
“The Schroders fund management team [Aymeric Forest and Iain Cunningham] adopts an unconstrained approach.”
The Schroders fund had diversified its portfolio across 1130 holdings, as per the fact sheet on 30 April.
The BlackRock fund benchmarks its performance against a customised benchmark index.