Institutional investors expect high demand for multi-asset funds over the next three years, particularly for funds without benchmarks and for strategies that use behavioural finance techniques.
A survey of 226 financial institutions globally found that 70% of them expect their peers to increase allocations to multi-strategy funds.
Delegation of investment decisions is the strongest reason for investing in these funds, the research, by NN Investment Partners, the asset manager of NN Group based in the Hague, found.
When asked about demand for funds without a benchmark, half of the institutional investors expect there will be greater demand while 15% expect this will not be the case. In particular, 45% expect demand will also increase over the next three years for global multi-asset strategies that use behavioural finance techniques.
Valentijn van Nieuwenhuijzen, head of strategy, multi asset at NN Investment Partners, says complexity is part of what attracts investors to mulit-strategy funds.
“Thanks to globalisation, financial markets have become increasingly integrated and complex. They are impacted by emotion and short-term thinking triggered by vast quantities of information flowing at high speeds. That leads to additional risks for investors but also opportunities.”
ING Group owns a majority share in NN Group, and NN Investment Partners was formerly ING Investment Management.
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