Multi-asset investing has grown dramatically in popularity during the last decade. Together with passive investing, it is currently one of the fastest-growing segments of the global asset management business.
However, this segment of the market has been relatively underserved by benchmark providers historically. This is largely because the inherent diversity of multi-asset investment—whether by geography, asset class or strategy—presents numerous benchmarking challenges.
As a result, many multi-asset funds have operated without a formal benchmark or have relied on peer group approaches to benchmarking, despite the inherent limitations.
In this first part of a two-part series, we summarize the growth of multi-asset investing and suggest some of the reasons for its rising popularity. We then explore the typical objectives of multi-asset funds and provide a categorization of such funds.