Understanding risk bound fund families and their suitability for advisers and clients

by Patrick Norwood
Investment Consultant

September 2021

In recent years, with the market volatility we have seen, there has been a shift in investors’ primary focus from being on return, to being on risk. This document will take a closer look at the multi-asset funds universe and risk bound funds.

These funds exist as ‘families’ – normally four or five funds run by the same fund management team and following the same investment process, but with expected return and risk for each fund increasing across the family. Risk bound funds aim to maintain a risk level, or match a specific profile, over time. The multi-asset fund universe, include funds that hold active investments, passive investments or a blend of the two.

The learning objectives in this publication are:

  • Identify the main similarities and differences between multi-asset funds, discretionary bespoke portfolios, discretionary managed portfolio services directly from the manager and discretionary managed portfolio services via a platform
  • Identify the different ways in which the multi-asset fund universe can be broken down
  • Describe what risk bound multi-asset funds are, how they work, how they can be used and how their market has grown over the last few years
  • Understand the benefits of risk bound funds to advisers and their clients
  • Describe how risk bound funds can be rated from both a quality and suitability point of view

The document is accredited by the CII/PFS and CISI for up to 30 minutes of structured CPD.

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