Absolute return is the most popular performance target among institutional investors for multi-asset funds, according to research conducted by NN Investment Partners (NNIP).
The survey, conducted among 226 institutional investors across the globe revealed that nearly one in third (32%) of respondents saying an absolute target return, such as ‘Cash plus X%’ is the most appropriate benchmark for multi-asset strategies.
Valentijn van Nieuwenhuijzen (pictured), head of Strategy, Multi-Asset at NNIP, says: “Controlling risk has become highly important to investors following the global financial crisis. They want decent returns but wish to limit the downsides, too. We allocate risk in our portfolios, creating the right balance between safer assets, which offer limited upside but downside protection, and higher risk assets that deliver strong growth. In this way we respond quickly to opportunities while creating a level of robustness against unexpected shocks, meeting clients’ wishes for risk-adjusted returns.”
One fifth (22%) cite a benchmark based on the average performance of peer funds and 14% prefer a pre-set target return such as 10% per annum. One fourth of respondents (24%) say any kind of benchmark is irrelevant. At the same time, nearly half of investors quizzed (43%) said they were considering long/short multi-asset funds with no benchmark or a ‘cash-plus’ target this year.
When asked about the acceptable range of volatility for global multi-asset funds, 45% of institutional investors believe it should be no more than plus/minus 10%, 34% say no more than plus/minus 5%, and 10% say plus/minus 4%.
Fund Selector Absolute Return Focus Frankfurt
InvestmentEurope is delighted to announce the Fund Selector Absolute Return Focus Frankfurt to be held on 21 April in Frankfurt at the Hilton Frankfurt.
Click here for further details: http://www.investmenteurope.net/event/fund-selector-absolute-return-focus-germany-2015/