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‘Don’t judge multi-asset on one year’s performance’

Swip’s multi-manager team believes multi-asset investment should not be dismissed as a failure on the basis of one tough year.

The company says last year was challenging for all managers and asset classes except cash and government bonds. Its multi-manager diversity fund lost 13 per cent last year, of which 8 per cent was due to its fund of hedge fund holdings losing money in December.

Head of multi-manager Mark Harries says the diversity fund’s performance was hurt in relative terms last year but is up by 1 per cent this year while the average fund in the cautious managed sector is down by 5 per cent. He says a broadly diversified portfolio is a healthy way to protect capital as it lowers the risk of all asset classes.

Harries says investors should not take a short-term view when markets are turbulent as the most recent experience is not a good indicator of future performance. He says: “It is easy to say multi-asset investing does not work. It did not in one year – last year – but it is easy for investors to do the wrong thing if they base an investment decision on one year. You do not want to base investments on the most previous experience.”

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