Chart 1. Funds under management: total global funds (in millions of EUR)

In terms of funds under management, mixed funds have enjoyed the fastest growth in recent years in Europe, and in Spain there has been an additional component, with many risk-parity funds falling into the mixed fund category. For example, several asset management companies decided to apply risk-parity approach in their classic mixed funds, such as Carmignac Patrimoine, Nordea Stable Return and DWS Kaldemorgen. In our case, the multi-asset funds are Mora Multi-Asset Tristaina, Mora Multi-Asset Casamanya or Mora Multi-Asset Comapedrosa.

This is one of the most advantageous ways of adapting to MiFID 2 and optimising the client’s portfolio. The first step is to carry out the pertinent tests on objectives and restrictions based on the client’s investments and financial knowledge. And then based on these, the client is given a risk profile (conservative, moderate, aggressive, etc…) which then corresponds to a specific vehicle. This ensures a monitoring and professional management of the portfolio that is consistent with profile’s needs, and the avoidance of products that do not fit the profile (one of the objectives of MiFID 2).

Chart 2. Funds under management: mixed Fixed Income (millions of EUR)

Many entities have decided to structure the profiles via funds in funds; but this is not the only way of doing it. There are alternatives, such as managed portfolios, model portfolios, or also funds that invest directly and not via external funds. A mixed model with direct assets and third-party funds or ETF also offer advantages, through the synergies of in-house management and third-part specialisation. As with any kind of asset, there are performances differ substantially within the category. Historically, a large part of returns has been generated by asset, sector, geographical zone, and fixed income segment allocation, but specific stock selection should not be overlooked.

At MoraBanc we offer a diverse and attractive range of investment funds for all types of investor profile. For more information visit our website or contact your account manager.

This article was published on Markets and Strategies,  the monthly publication in which our experts at MoraBanc Asset Management analyze and give their vision of the most important international economic news.