Best Multi Asset Funds UK to Watch
In this guide, we review some Popular Multi Asset Funds UK for 2022.
Multi Asset Funds UK
Here’s a breakdown of some multi asset funds UK available in the market today. We review each multi asset fund in great detail further down.
- iShares Core Growth Allocation ETF
- iShares Core Conservative Allocation ETF
- Invesco Variable Rate Preferred ETF
- Vanguard Balanced Index Fund Admiral Shares
- BlackRock Dynamic Diversified Growth Fund
Popular Multi Asset Funds Reviewed
By investing in a multi asset fund, you are able to approach the financial markets in a diversified manner. That is to say, rather than putting all of your eggs into a collection of stocks, your portfolio might also contain bonds, REITs, and gold.
Before investing, you need to research core metrics surrounding the investment fund – such as past performance, perceived risk, and fees.
To give you a bit of inspiration, below we have reviewed 10 multi-asset funds.
1. iShares Core Growth Allocation ETF
One of the popular multi asset funds UK is the iShares Core Growth Allocation ETF. Although this multi asset fund contains just seven holdings – each instrument represents an individual ETF. In turn, your investment will consist of a highly diversified range of stocks and bonds.
For example, there is a 32% weighting on the iShares Core S&P 500 ETF. This will get you access to 500 large-cap companies listed in the US. This includes everything from Tesla, Facebook, and IBM to Microsoft, Apple, and Amazon. You will also have a 30% stake in the iShares Core Total USD Bond Market.
This consists of high-grade bonds that generate regular income via coupon payments. We also like the fact that this multi asset fund gets you access to the emerging markets. In particular, you will have a 7% holding in the iShares Core MSCI Emerging Markets ETF
In terms of the financial returns, the iShares Core Growth Allocation ETF has performed very well since its inception in 2008 – generating growth of more than 171%. This translates to average annualized gains of 8.57%. Notably, this multi asset fund comes with an annual expense ratio of just 0.31%. This means that you will pay just 3.10 per year for every £1,000 invested.
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2. iShares Core Conservative Allocation ETF
As the name suggests, this multi-asset fund will take a conservative approach to the financial markets – ensuring that your capital is allocated into less risky markets.
This iShares multi asset fund will also invest in a diversified basket of stocks and bonds. In fact, many of the individual ETFs in this fund are similar to the iShares Core Growth Allocation, albeit, the weighting system is much more geared towards fixed-income bonds. For example, the allocation towards the iShares Core Total USD Bond Market ETF goes from 30% up to 56%.
Additionally, your holding in the S&P 500 is reduced from 32% down to 17%.
For example, since its inception in 2008, the iShares Core Conservative Allocation ETF has generated average annualized returns of 5.91% per year. This translates into total returns of 101%. The expense ratio on this multi asset fund is even more competitive at just 0.25% annually.
3. Invesco Variable Rate Preferred ETF
The Invesco Variable Rate Preferred ETF is a multi asset fund holds a collection of hybrid securities that track traditional equities – much of the portfolio consists of bonds issued by US corporations.
For example, there are high-grade bonds issued by the likes of JPMorgan Chase, General Electric, Wells Fargo, BP, Bank of America, GMAC Capital, and more. Breaking this multi asset fund down further, the portfolio is heavily investing in the financial and banking sectors – with a 76% weighting.
With that said, you will also be gaining exposure to other sectors – such as energy, utilities, industrials, and consumer staples. This is also one of the popular asset funds for dividends – as the provider makes a monthly income distribution and so is a popular fund to invest for a monthly income.
Since this multi asset fund was incepted, it has generated average annualized returns of 5.41%. Based on a 5-year period, the fund has grown by 7.06% per year. Finally, when it comes to fees, the Invesco Variable Rate Preferred ETF charges an expense ratio of 0.50% per year.
4. Vanguard Balanced Index Fund Admiral Shares
If you’re looking to create a super-diversified portfolio at the click of a button – the Vanguard Balanced Index Fund Admiral Shares is worth looking into. This Vanguard fund takes a systematic 60/40 split. That is to say, 60% of the assets held in its portfolio will track the broader US stock markets while 40% will be held in fixed-income bonds.
Regarding the former, this contains more than 3,400 individual stocks. Not only does this include the likes of Apple, Johnson & Johnson, Visa, JPMorgan Chase, and 9/10 Apple Inc. Microsoft Corp. Amazon.com Inc. Alphabet Inc. Facebook Inc. Tesla Inc. JPMorgan Chase & Co. Berkshire Hathaway – but plenty of low-cap stocks from the Russell 2000.
When it comes to fixed-income securities, this popular multi asset fund consists of more than 8,600 individual bonds. These are primary high-grade bonds that possess little risk – with the current yield averaging 1.4%. Although many of the asset classes in this fund are considered high-grade, financial returns have outperformed many traditional markets since inception.
This means that the fund has managed to track the benchmark virtually like-for-like for more than two decades. When it comes to fees, the Vanguard Balanced Index Fund Admiral Shares is one of the cheapest in this space. At just 0.07% per year, this means that you will pay just 70p per year for every £1,000 invested.
5. BlackRock Dynamic Diversified Growth Fund
The BlackRock Dynamic Diversified Growth Fund aims to outperform the Bank of England base interest rate by at least 3.5% annually – across a medium period of three years. In order to achieve this goal, this multi asset fund will invest at least 80% of its funds into fixed-income bonds, as well as short-term debt securities.
There is also holdings in traditional stocks and index funds, as well as physical gold. In total, you will be gaining exposure to more than 1,800 individual assets. Breaking the portfolio down further, some of the largest holdings in this multi asset fund include the Scottish Mortgage Investment Trust, Foresight Solar Fund, Emerging Markets Equity Fund, and the iShares Physical Gold ETF.
In terms of asset allocation, 38% is equally held in stocks and fixed-income bonds. You then have 18% held in cash and cash equivalents, and just under 5% in alternative investments. We should, however, note that this multi asset fund is somewhat pricey at 1.35% per year.
This is largely because of the types of markets that you will be gaining access to – especially when it comes to foreign-issued bonds and alternative assets. Looking at the fund’s past performance, BlackRock has generated average annualized returns of 4.33% over the past five years. This means that it has hit its target of outpacing the Bank of England base rate by 3.5%.
Other Multi Asset Funds UK
Here is a list of another 10 popular multi asset funds available to invest in the UK.
- RPAR Risk Parity ETF
- Pacer Trendpilot 100 ETF
- Amplify BlackSwan Growth & Treasury Core ETF
- iShares GSCI Commodity Dynamic Roll Strategy ETF
- FormulaFolios Hedged Growth ETF
- EquityCompass Risk Manager ETF
- Arrow Dow Jones Global Yield ETF
- FormulaFolios Smart Growth ETF
- 6 Meridian Hedged Equity-Index Option Strategy ETF
- Cambria Global Asset Allocation ETF
You can evaluate whether or not the above multi asset funds are right for you by visiting the provider’s website.
What are Multi Asset Funds?
Put simply, multi asset funds allow you to invest in a diversified portfolio of financial instruments. Originally, when you invest in a classic ETF or mutual fund – the provider will focus on a specific market. For example, the fund might look to target FTSE 100 stocks or shares that yield high dividend payments.
On the other hand, the popular multi asset funds will invest in a wide variety of markets. For example, the previously discussed Vanguard Balanced Index Fund Admiral Shares ETF invests in everything from stocks and bonds to gold and cash equivalents.
How do the Popular Multi Asset Funds UK Work?
In the terms of the fundamentals, the popular multi asset funds UK work much the same as an ETF. That is to say, the multi asset fund will be managed by a large-scale provider – such as iShares, BlackRock, Vanguard, or Invesco. Once you invest in your chosen multi asset fund – the provider will determine which investments to make.
This allows you to invest a lump sum and not need to worry about researching the financial markets. Instead, the fund manager takes care of everything on behalf of its investors. When it comes to financial returns, the popular multi asset funds UK target two key areas of growth – which we elaborate on below.
The NAV (Net Asset Value) evaluates the current market value of the multi asset fund. This is based on the assets held by the fund at the current market price – less outstanding liabilities.
- The multi asset fund has £400 million worth of UK equities
- It also has £200 million in US-issued bonds and £50 million in gold
- As such, the multi asset fund has a NAV of £650 million
This figure will rise and fall at the end of each trading day and is then reflected in the stock price of the multi asset fund. After all, the popular multi asset funds are represented via ETFs – which are listed and traded on public stock exchanges.
In the vast majority of cases, multi asset funds UK will hold a relatively sizable allocation of fixed-income assets. This is often a combination of government and corporate-issued bonds – alongside short-term debt securities.
Either way, by holding a stake in a multi asset fund that holds fixed-income instruments – you will be entitled to your share of dividend payments.
Once again, this works the same way as a conventional ETF or investment trust, as the size of your payment will be determined by how much capital you have invested in the fund.
We found that in many cases, the multi asset funds UK will make a dividend distribution every month. Otherwise, it will be every three months.
Popular Multi Asset Funds Brokers
If you’re ready to start investing in the popular multi asset funds UK – you will need to find a suitable brokerage site. In the sections below, we have reviewed two stock brokerages that allow users to invest in Multi Asset funds.
eToro is an online broker and trading site that has a huge client base in excess of 26 million users. The platform offers a wide range of assets and financial markets – covering 2,400+ stocks and 250+ ETFs from 17 global exchanges. Other supported markets include digital currencies, commodities, indices, and forex.
This popular broker also gives you access to some popular multi asset funds – including many of the investments we have discussed on this page. Irrespective of which multi asset fund you elect to opt for – the minimum investment is just $10. Furthemore, eToro is a 100% commission-free broker.
This means that you won’t pay a fee to enter or exit the market. If your chosen multi asset fund is listed on the London Stock Exchange, you will also avoid paying any stamp duty tax (0.5%). In addition to multi asset funds, another passive investment that eToro offers is its Copy Trading tool. This allows you to copy an experience eToro investor that has a verifiable track record. There are also diversified CopyPortfolios, which are managed by the team of in-house traders at eToro.
In terms of getting started, opening an account at eToro shouldn’t take you more than 10 minutes. This is inclusive of registering, uploading a copy of your ID, depositing money, and completing your multi asset fund investment. Users can choose from a UK debit/credit card or bank wire, as well as e-wallets like Paypal and Skrill. Finally, and perhaps most importantly – your capital at eToro is protected by the FSCS scheme and the broker is authorized and regulated by the FCA.
|Stock Broker||Minimum Deposit||Fractional Shares?||Pricing System||Cost of Buying Stocks & ETFs||Fees & Charges|
|eToro||$10||Yes – $10 minimum||0% commission on ALL real stocks, spreads for CFDs||Market spread is not included when buying real stocks||No Deposit fees, $5 withdrawal fee, $10 inactivity fee, no account management fees.|
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In conclusion, multi asset funds allows users to invest in a combination of stocks, bonds, index funds, real estate, and even gold.
If you’re ready to invest in a multi asset fund, you should do so with a reputable stock broker that can cater to your investing needs.