Multiasset strategies offer diversification across asset classes from "summary" of Institutional Investment Management by Frank J. Fabozzi
Multiasset strategies provide investors with the opportunity to diversify their portfolios across different asset classes. By investing in a variety of assets such as equities, fixed income securities, real estate, commodities, and alternative investments, investors can reduce the overall risk in their portfolios. Diversification across asset classes helps to mitigate the impact of market fluctuations on the portfolio. When one asset class is underperforming, other asset classes may be performing well, thus balancing out the overall return of the portfolio. This can help to smooth out the volatility of returns and provide more stable long-term performance. Additionally, different asset classes tend to have low correlation with one another. This means that they do not move in the same direction at the same time. By investing in assets with low correlation, investors can further reduce the overall risk in their portfolios. This can help to improve the risk-adjusted return of the portfolio over the long term. Furthermore, multiasset strategies allow investors to take advantage of opportunities in different market environments. For example, when equities are performing well, fixed income securities may provide a hedge against market downturns. Similarly, when interest rates are low, real estate and commodities may offer attractive returns. By diversifying across asset classes, investors can capture these opportunities and potentially enhance their overall returns.- Multiasset strategies offer investors the benefits of diversification across asset classes, reduced risk through low correlation, and the ability to capitalize on opportunities in different market environments. By constructing a well-diversified portfolio that includes a mix of assets, investors can achieve more stable and potentially higher returns over the long term.
