Most portfolios have a significant amount of “bottom-up” diversification, which comes from individual managers selecting individual securities within a given asset class. But Brian Singer, head of William Blair’s Dynamic Allocation Strategies Team, says the “bottom-up” approach isn’t enough. As he explains in this video, multi-asset portfolios are an attractive complement to traditional investments.
Multi-asset portfolios differ from traditional portfolios in that they invest across asset classes, market-cap sizes, and geographical location. Everything from U.S. stocks to emerging-markets equities; from government bonds to corporate debt; from commodities to currencies to real estate – and more – are potential investments for multi-asset strategists, with a different manager typically focusing on each asset class. This kind of diversification is impossible to achieve within a single asset class, and difficult to achieve with any kind of “bottom-up” approach. Instead, Mr. Singer suggests that investors consider adding multi-asset strategy exposure to complement the “bottom-up” diversification that already exists in most portfolios.