The benefits of multi-asset funds
Discover the reasons why investors are choosing multi-asset funds

Investing can seem like a daunting task - but it doesn’t have to be. You can invest your money in a diverse portfolio of assets in a single fund.
What is a multi-asset fund?
When you invest in a fund, the team managing that fund usually splits your money across a bundle of investments where all (or most) of them belong to a single type of asset.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
For example, most retail funds are equity funds, meaning they hold a selection of shares in a range of different companies. Similarly, a bond fund will put almost all your money into corporate and/or government bonds.
A fund has to obey its mandate in terms of what it can invest in, or “hold”. The fund’s mandate will usually state how much of the holding should be within a certain region, the margin of discretion the fund manager has, the amount of cash held at any one time, and so on.
A multi-asset fund, such as those offered by Charles Stanley’s Personal Portfolio Service, is a little bit different. It allows a fund manager to hold several different types of assets within the fund. For example, a fund might be split between shares, corporate bonds, and UK government bonds or “gilts”.
What are their benefits?
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Some people claim that the asset mix in your investment portfolio is the greatest determining factor in the returns that you make. But deciding how to balance your investments between shares and bonds - or any other type of asset can be extremely difficult.
With multi-asset funds, that responsibility is taken out of your hands and put in those of professionals, who will manage the asset balance of your fund to meet a specific risk target, or manage several funds with different balances and different levels of risk. A multi-asset fund could provide you with all the diversification you require from an investment portfolio.
How can they mitigate risk?
One of the core principles in building an investment portfolio is diversification. To use an extreme example, if you put all your money into a single company and it goes bust, or its share price takes a dive, you are totally exposed to that downturn.
If you hold different companies that are all in the same business, such as oil production, or property development, your portfolio will be slightly more diversified, but you still have a huge amount of exposure to market risk, and the risk that the market the companies operate in could collapse or decline.
So, you should ideally try to hold many different shares across many companies, sectors and geographical regions. However, sifting through and picking a number of shares in unfamiliar markets takes a huge amount of work. You might decide instead to invest in a professionally managed fund, where a team of researchers led by a fund manager do the legwork for you, and let you invest in the companies they find, for a fee.
But even then, if you are invested 100% in shares, that still exposes you to fluctuations in the stock market. To diversify even further, you might want to hold several different types of assets: shares, corporate bonds, gilts, property, and possibly some cash to round things out. A multi-asset fund seeks to diversify away volatility by investing in several different types of asset class.
What tax-efficient savings can multi-asset funds make?
The great thing about putting money into a stocks and shares Isa, is the potential to make money without having to pay taxes on it. You won’t have to pay any capital gains tax when you sell shares that are inside an Isa, and you won’t have to pay tax on any of the dividend income you make from shares, or coupon payments on bonds, or interest rates on cash - or any other source of investment income.
That means that instead of paying tax on income, you can take the money you would have handed to the government, and invest it right back into your pot. This adds a significant potential boost to your returns. Indeed, the combination of compound interest and reinvesting dividends is one of the most powerful forces in growing an investment pot. So if you want to put money into a stocks and shares Isa but aren’t sure how to invest it, a multi-asset fund could be an easy and efficient way to get the job done.
Find out more at Charles-stanley.co.uk/personal-portfolio-service
The value of investments can go down as well as up and investors may not get back the amount they originally invested. Charles Stanley & Co. Limited is authorised and regulated by the Financial Conduct Authority and a member of the London Stock Exchange. Registered in England No. 1903304, Registered office: 55 Bishopsgate, London EC2N 3AS.
-
Taking aim at Venezuela’s autocrat
Feature The Trump administration is ramping up military pressure on Nicolás Maduro. Is he a threat to the U.S.?
-
Comey indictment: Is the justice system broken?
Feature U.S. attorney Lindsey Halligan has indicted former FBI Director James Comey on charges of lying and obstructing Congress
-
Government shuts down amid partisan deadlock
Feature As Democrats and Republicans clash over health care and spending, the shutdown leaves 750,000 federal workers in limbo
-
When should you use a personal loan vs. a credit card?
The Explainer Determine whether you need a lump sum upfront or a borrowing limit
-
How will Fed rate cuts affect the housing market?
the explainer An anticipated series of Federal Reserve cuts could impact mortgage rates
-
What to know about investing in ETFs
The Explainer Exchange-traded funds can be a great choice for beginners
-
How to ditch ‘buy now, pay later’ debt
the explainer Recent changes mean BNPL will soon affect your credit score
-
The biggest changes to Social Security coming in 2026
The Explainer They will include an annual cost of living adjustment and a higher wage cap
-
Is duty-free shopping worth it?
the explainer How to determine whether you are actually getting a good deal
-
What's a bridge loan and how could it make buying your next home possible?
The Explainer This type of loan has both pros and cons
-
How to put student loan payments on pause
The Explainer If you are starting to worry about missing payments, deferment and forbearance can help