Dan Brocklebank of Orbis says: “Generating our results required a really different portfolio from our peers. For years we held no long-term government bonds, viewing them as ‘return-free risk’.
“The largest driver of our returns was security selection, vindicating our belief that a ‘bottom-up’ approach can work in a multi-asset fund, where fund-of-funds models often predominate.
“By picking individual stocks and bonds, we outperformed despite a decade of headwinds for our value-oriented philosophy. We consider the subsequent decade will see those winds reverse in our favour.”
Best passive multi-asset funds
If you would like to invest at low price, a passive multi-asset fund may suit you.
Mark Preskett of Morningstar, the investment company, says: “A passive multi-asset fund typically comes at a lower cost than a more traditional multi-asset fund, especially within the energetic fund of funds sector, where charges might be eye-wateringly high.
“One mustn’t underestimate the impact of fees on investor returns. Morningstar studies show the expense ratio as probably the most proven predictor of future fund returns, and success rates of the most affordable funds are far higher than of the most costly.”
Vanguard’s LifeStrategy range offers perhaps the best-known multi-asset funds. Although actively managed in a single sense – an investment manager monitors the portfolios to envision that the asset allocation doesn’t shift over time – the funds consist of trackers that follow an index.
“Multi-asset funds from Vanguard’s ‘LifeStrategy’ range are particularly popular amongst our investors,” says Jobson. “They stand out for his or her clear and defined strategy, low price and powerful long-term record of outperformance since inception in 2011.”
The typical annual charge across the range is just 0.22pc. The LifeStrategy 100pc Equity fund, which has all its money within the stock market, has, predictably, been the very best performer over the past 10 years, delivering 144pc, whereas LifeStrategy 80pc Equity has returned 109pc and LifeStrategy 60pc Equity has returned 79pc.
Monika Calay of Morningstar says: “Vanguard’s LifeStrategy series shows how multi-asset funds that hold only passive investments can provide broad diversification across asset classes efficiently and at low price.
“Nonetheless, their largely static allocations may lag when markets shift rapidly. For instance, the LifeStrategy funds’ longer-duration bonds were more sensitive to rises in rates of interest than rival funds, which hurt them when rates rose last 12 months.
“Despite this setback, LifeStrategy funds remain a formidable challenge for energetic managers. Over the long run they’re hard to beat.”
Barclays Wealth Global
High street banks get plenty of flak for his or her poor fund performance however the Barclays Wealth Global funds have outperformed many multi-asset rivals.
Particularly, the relatively high-risk Barclays Wealth Global 4 portfolio has returned 75pc over the past 10 years, compared with around 60pc for its peer group. It has not less than 70pc of its assets in passively managed funds and costs 0.45pc a 12 months.