ICR114: Multi-Asset Funds vs Brainless Portfolios

In this episode of Informed Choice Radio, Martin talks to Abraham Okusanya, founder of research firm Finalytq, about new research into multi-asset investment funds.

There is also a roundup of the latest personal finance news and an update from the world of Informed Choice.

Multi-asset funds vs Brainless Portfolios

In this episode of Informed Choice Radio, Martin speaks to Abraham Okusanya, founder of investment research firm Finalytq.

I invited Abraham onto the podcast because he has been causing something of a storm in the world of retail financial services this week.

It’s because of the publication of his latest research, which found that the massive multi-asset fund market is doing a disservice to investors, generating far lower returns than the cheaper alternatives.

The report claims that multi-asset fund managers are “not only genuinely unskilful” but “systematically reduce clients’ odds of accomplishing their objectives”.

As part of the research, Abraham rated 65 different multi-asset funds, looking at their charges and performance, as well as the financial strength of the fund provider.

Of these 65 funds, he only identified one fund considered to be excellent value for money, with only 6 rated as good. The other 58 funds were scored as either fair or poor.

This is an important topic for investors, as many billions of pounds are invested in these multi-asset funds. They are often seen as set it and forget it portfolios, which require little involvement from investors once the initial decision has been made to invest.

Personal finance news update

-The new Chancellor Philip Hammond has set a date for his first Autumn Statement, which will be presented to Parliament on Wednesday 23rd November.

-Nearly half of UK employees are suffering from a crisis of confidence when it comes to making financial decisions.

-Interest rates have remained on hold at 0.25%, with the Bank of England saying another interest rate cut is a possibility.

-Price inflation has remained steady at 0.6% in the year to August.

-The new plastic £5 note has entered circulation this week, although many parts of the country will have to wait to get their hands on one.