More then a third of independent financial advisers (IFAs) are encouraging their clients to invest in multi-asset products, according to research.
In a study of 114 investment professionals, Baring Asset Management (Barings) said 36% of IFAs encouraged their clients to invest in multi-asset products in response to "current market volatility".
Barings said in the last quarter of 2014, nearly half (46%) of the respondents said they were looking to increase exposure to multi-asset growth funds, compared with 30% in the first quarter of 2014.
According to the firm, multi-asset investments could balance risks and diversify investment portfolios through a combination of asset classes such as equities, bonds and alternatives.
The firm reported advisers had become increasingly favourable towards multi-asset products over the past 12 months, with 73% saying they were "favourable" overall, and 29% of those reported to be "very favourable" towards them.
In terms of multi-asset income products, the research reported a "growing appetite" for them. Nearly a quarter (24%) claimed to be "very favourable" and 70% said they were "favourable" towards the asset class. The research also revealed two in five (41%) of professionals said they would increase their clients' exposure to multi-asset income products.
Rod Aldridge, head of UK wholesale distribution at Barings, explained why multi-asset investments became popular. He said: "The research has highlighted yet again that multi-asset investing is becoming an increasingly popular investment class in the UK. This is being driven by the fact that multi-asset strategies aim to deliver equity-like returns with less risk than holding an equity-only portfolio. The critical skillset in achieving this is dynamic asset allocation, and a willingness to move between different asset classes when necessary.
"In light of significant UK pension reforms, we believe there will be an increasing need for products that are designed to provide a regular income while minimising risk. Multi-asset products can fit this market very effectively."
