What Are Multi Asset Funds and How Do They Work?
What Are Multi Asset Funds?
A multi asset fund (MAF) is an FCA-regulated Collective Investment Scheme that holds a diversified selection of typically around 20 funds within a single product. It can also hold direct securities alongside those funds.
Because of how the fund is structured, the product held on platform is always the same for every investor accessing it, although different share classes may be available. When the fund manager makes changes, those changes apply simultaneously to all clients.
Because of how the fund is structured, the product held on platform is always the same for every investor accessing it, although different share classes may be available. When the fund manager makes changes, those changes apply simultaneously to all clients.
How do Multi Asset Funds work?
The fund manager controls all investment decisions centrally. Trades can be executed instantly, which means the manager can respond quickly to market events without needing to act client by client.
One notable structural advantage over a Managed Portfolio Service (MPS) is that MAFs can hold both retail and institutional share classes of funds. Institutional share classes are typically significantly cheaper, which can have a meaningful impact on overall costs for investors.
For managers running a large volume of assets, preferential commercial terms can often be negotiated with the underlying fund providers. This is possible because adviser assets are identifiable within nominee accounts, giving the manager leverage when it comes to commercial arrangements. Transaction costs are also typically lower than those associated with an MPS.
Read our article on Multi-Asset Funds or MPS: the pros and cons
One notable structural advantage over a Managed Portfolio Service (MPS) is that MAFs can hold both retail and institutional share classes of funds. Institutional share classes are typically significantly cheaper, which can have a meaningful impact on overall costs for investors.
For managers running a large volume of assets, preferential commercial terms can often be negotiated with the underlying fund providers. This is possible because adviser assets are identifiable within nominee accounts, giving the manager leverage when it comes to commercial arrangements. Transaction costs are also typically lower than those associated with an MPS.
Read our article on Multi-Asset Funds or MPS: the pros and cons
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