- Out of the 487 Multi Asset funds analysed, 72 consistently ranked among the best performing funds in their sectors and received a top 4 or 5-star rating.
- 313 of the 487 funds analysed received a poor performing 1 or 2 star performance rating.
- The Vanguard LifeStrategy 80% Equity fund, with £13 billion in assets, is one of the largest in its sector. It has also been one of the best performing funds in the IA Mixed Investment 40-85% sector, delivering 5 year returns of 44.77%, which was comfortably above the sector average of 29.70%.
- The Vanguard LifeStrategy 20% Equity fund is one of the most popular funds in its sector with £1.2 billion of assets under management. However, it has also been among the sectors worst performers over the past 1, 3 & 5 years.
As investment cycles grow shorter and more volatile, asset allocation has become increasingly critical. This has propelled the rise of Multi-Asset funds, which many investors value for their all-in-one approach to asset allocation. Some see them as a practical solution for navigating unpredictable market conditions.
The growing emphasis on asset allocation, coupled with the rising demand for convenience, has further fuelled the popularity of Multi-Asset funds. Their appeal is evident with assets under management now reaching £145.5 billion, which represents 11% of all assets held within Investment Association sectors. However, not all Multi-Asset funds deliver competitive returns.
In this report, we analyse 487 multi asset funds and identify the best and worst performers over the past 1, 3, and 5 years, offering key insights into the performance of the three Investment Association sectors that house these diverse funds.
Multi Asset Funds Performance
We analysed the performance of 487 multi-asset funds within three Mixed Investment sectors. These sectors represent varying risk models, allowing for direct comparisons of funds with comparable risk levels.
IA Mixed Investment 0-35% Shares Sector
The IA Mixed Investment 0-35% Shares sector is home to 71 funds with combined assets under management of £7.8 billion. The sector includes funds that invest a maximum of 35% of their portfolios in equities, with the remainder typically allocated to lower-risk assets such as bonds, cash, or other fixed-income investments. These funds are designed for cautious investors seeking modest growth with a focus on capital preservation and reduced exposure to stock market volatility.
IA Mixed Investment 20-60% Shares Sector
The second sector analysed was the IA Mixed Investment 20-60% Shares sector which is home to 188 funds with combined assets under management of £46.4 billion. This sector adopts a relatively balanced approach, with each of the funds in this sector allocating between 20% and 60% of their assets to equities.
IA Mixed Investment 40-85% Shares Sector
The IA Mixed Investment 40-85% Shares sector, is the largest of the three sectors analysed with 228 funds holding a combined £91.3 billion of investor money. The funds in this sector have a more adventurous strategy with between 40% and 85% of their assets held in equities.
This analysis covered fund performance over the past 1, 3, and 5 years, with each fund evaluated based on its returns and rankings within its sector. These sectors address a range of risk profiles, from cautious to growth-oriented, providing diverse investment options tailored to individual goals and preferences.
Our analysis of all 487 multi asset funds revealed that only 72 achieved top-performing 4 or 5-star ratings. In stark contrast, 64.3% underperformed, with 167 funds earning a 2-star rating and 146 receiving the lowest 1-star rating.
These findings highlight that a significant proportion of multi asset funds have underperformed compared to their sector peers.
Improve your investments with Yodelar - Book A No Obligation Call With A Yodelar Investment Adviser
Top Performing Multi Asset funds
The 5 funds below have consistently been among the top performing multi asset funds in their respective sectors over the past 1, 3 & 5 year periods analysed.
Each of these funds received a top 5 star rating based on how they ranked for performance compared to their sector peers.
How Yodelar Rate Fund Performance
Schroder Global Multi Asset Adventurous Portfolio Fund
The Schroder Global Multi-Asset Adventurous Portfolio Fund has proven itself a strong performer within the IA Mixed Investments 40-85% Shares sector. Over the past year, it returned growth of 18.69%, which was comfortably better than the sector average of 15.41%. Over the recent 3 & 5 years the fund continued to outperform with returns of 18.90% and 37.56%, significantly above the sector averages of 9.20% and 29.7%, respectively.
This fund’s adventurous approach, with a higher allocation to equities, seems to be paying off. By leaning into global growth opportunities, it has captured impressive returns, especially over the long term, where it has delivered 26% more growth than its peers. While this strategy carries higher risks, it’s clear that Schroders’ expert management has balanced that risk effectively, producing standout results.
What’s also evident is the fund’s ability to perform during challenging periods, such as the market turbulence of recent years. Its global multi-asset strategy, drawing on a mix of asset classes and regions, has been key to managing risk while still capitalising on opportunities. This approach has helped the fund navigate the ups and downs of a volatile market environment, from the pandemic’s disruptions to rising inflation.
Artemis Monthly Distribution Fund
Launched on 21st May 2012, the Artemis Monthly Distribution Fund currently manages £861.05 million and is designed to generate a monthly income, paired with the potential for capital growth over 5 years.
Its investment strategy allocates 40% to 80% in bonds, spanning all credit qualities, and 20% to 60% in equities. This balance aims to provide a steady income while capitalising on growth opportunities in the equity market.
The fund has consistently delivered competitive returns with recent 1, 3 & 5 year growth of 21.51%, 20.23% and 36.42%. In contrast, the sector averaged 11.81%, 4.68% and 17.61% respectively. This outperformance is largely attributed to the fund’s global diversification, which reduces reliance on any single market and mitigates volatility. By investing across a wide range of global assets, the fund enhances stability while maximising potential returns.
L&G Future World Global Opportunities Fund
The L&G Future World Global Opportunities Fund has also established itself as a prominent multi asset fund within the IA Mixed Investment 20-60% Shares sector.
Its main goal is to deliver positive returns through a combination of capital growth and income. It targets to achieve 5% above the Bank of England Base Rate per annum over rolling five years, though this is not guaranteed. The fund invests in shares and bonds, including investment-grade and sub-investment-grade securities issued by companies and governments in developed and emerging markets. Its diversified and actively managed strategy ensures a balance between risk and reward, allowing it to adapt to changing market conditions effectively.
Over the past year, this fund returned growth of 13.80%, surpassing the sector average of 11.81%. Over a three-year period, it achieved growth of 22.01%, which was the second highest out of in the sector and significantly exceeding the sector average of 4.68%. Impressively, over five years, it performed even better, ranking first among 152 funds in the sector with a growth of 42.86%, more than doubling the sector average of 17.61%.
The fund’s success is driven by its balanced asset allocation and broad geographical diversification. Its portfolio spans major regions such as the United States, Eurozone, the UK, developed Asia, and emerging markets, providing exposure to diverse economic landscapes. A major contributor to robust performance is its focus on the technology sector, with key holdings including Microsoft Corp, NVIDIA Corp, and Apple Inc. These industry leaders have played a crucial role in delivering the impressive returns.
Coutts Managed Ambitious Fund
The Coutts Managed Ambitious Fund, launched in 2019, currently oversees a substantial £1.3 billion of investors’ assets.
At least 65% of the fund is allocated to higher-risk assets, including UK and international equities, with indirect exposure to real estate and commodities. Up to 35% is invested in lower-risk holdings, such as UK and global bonds. Most investments are made through collective schemes and ETFs, while real estate and commodities are used tactically for short-term growth or income. The Investment Manager dynamically adjusts allocations to adapt to market conditions. This strategy has enabled the fund to consistently outperform its sector peers in the IA Mixed Investment 40-85% Shares sector.
The fund has delivered returns of 20.13%, 17.68%, and 37.53% over the past 1, 3 and 5 years, respectively. In comparison, the sector averages for these periods were 15.41%, 9.42%, and 29.7%. This consistent outperformance highlights the fund’s ability to capitalise on growth opportunities while maintaining a balanced approach to risk and reward.
Geographical diversification across UK and international markets enhances exposure to varied economic environments and mitigates reliance on any single region. Its focus on ESG principles supports sustainable investments with long-term potential, making it an excellent choice for steady growth and responsible investing.
Vanguard LifeStrategy 80% Equity Fund
The Vanguard LifeStrategy 80% Equity Fund is one of the largest in its category, boasting £13.19 billion in assets under management. It focuses on delivering long-term capital growth and income by allocating 80% to shares for growth and 20% to bonds and similar fixed-income investments for stability. By directing more than 90% of its assets in cost-efficient passive funds that track market indices, managed or operated by the ACD or its associates, the fund ensures broad diversification and reliable returns with minimal expenses.
This efficient approach has supported its solid performance and achieved a one-year return of 19.79%, well ahead of the sector average of 15.41%. Over 3 years, it delivered a return of 18.67%, eclipsing the sector average of 9.2%. Its 5-year performance has surmounted all competition, achieving a return of 44.77%, going beyond the sector’s 29.7% average. These results place it among the top-performing multi-asset funds in the IA Mixed Investment 40-85% Shares sector.
5 Worst Performing Multi Asset Funds
As highlighted in the performance analysis, 313 multi-asset funds have underperformed relative to their sector peers. The table below showcases the 5 worst-performing funds, offering a detailed overview of their overall performance over the past 1, 3, and 5 years.
We also explore why these funds consistently rank poorly, earning 1-star ratings due to failing benchmarks and delivering unsatisfactory growth.
7IM AAP Cautious Fund
The 7IM AAP Cautious Fund is designed for investors seeking a lower-risk approach to investing by combining strategic asset allocation with cost-effective passive investments, as it aims to balance risk and return. However, over the past 1, 3 & 5 years the fund has consistently been one of the worst-performing multi asset funds in the IA Mixed Investment 0-35% Shares sector.
Although the fund has a clear strategy, it has consistently failed to achieve competitive returns. In the last 12 months, it grew by 7.63%, falling short of the sector average of 9.76%. Over three years, it experienced a decline of -3.97%, while the sector average was 0.77%. In a five-year span, it returned 2.36%, which is well below the sector average of 9.04%.
The fund’s poor performance is primarily due to its reliance on passive strategies, which reduce flexibility during volatile markets. Additionally, broader economic challenges, such as rising interest rates and inflation, have adversely affected its fixed-income and equity investments, leading to consistently below-average returns.
AXA Ethical Distribution Fund
The AXA Ethical Distribution Z Acc Fund, part of the IA Mixed Investments 20-60% Shares sector, has consistently underperformed its peers over recent years. Over the past year, the fund returned 10.40%, lagging behind the sector average of 11.81%. Its three-year performance showed a significant decline of -11.17%, compared to the sector’s 4.68% gain, and over five years, its return of 2.13% fell far short of the sector’s 17.61% average.
This underperformance is directly linked to the fund’s ethical mandate, which limits its investment universe by excluding certain industries such as energy and tobacco. These exclusions have reduced the fund’s ability to capitalise on opportunities in some of the best-performing sectors during recent market cycles. This constrained approach has left the fund at a structural disadvantage compared to its more flexible peers.
The fund’s conservative allocation, with lower exposure to equities, has further hindered its performance. During periods of market recovery, this cautious stance has limited its capacity to participate in upside growth, leaving it unable to offset losses incurred during downturns. Combined with its restricted investment universe, the fund has struggled to keep pace with a sector that has benefited from broader and more dynamic asset allocation strategies.
Vanguard LifeStrategy 20% Equity Fund
The Vanguard LifeStrategy 20% Equity Gross Acc GBP Fund, classified within the IA Mixed Investments 0-35% Shares sector, is designed for investors seeking low-risk, conservative growth through a fixed allocation of 20% equities and 80% bonds. While this structure promotes simplicity and cost efficiency, the fund has faced notable challenges in delivering competitive returns over the past 1, 3, and 5 years. Its returns of 8.93%, -6.54%, and 2.66% have consistently underperformed the sector averages of 9.76%, 0.77%, and 9.04%, with similar risk-rated peers achieving significantly better returns.
The underperformance can be attributed to the fund’s strategic asset allocation and market conditions during the period. The fund’s fixed 80% allocation to bonds exposed it heavily to the adverse impact of rising interest rates and inflationary pressures, which have characterised global markets in recent years. As bond yields increased, bond prices fell, leading to negative or lacklustre returns from the fixed income portion of the portfolio. Funds with greater flexibility to adjust their bond exposures or diversify into higher-yielding credit or alternative fixed income instruments likely fared better during these challenging periods.
Additionally, the fund’s limited 20% equity allocation constrained its ability to benefit from market recoveries or strong equity performance in certain sectors or regions. Peers within the IA Mixed Investments 0-35% Shares sector, which adopted a more dynamic allocation approach or included a broader range of growth-oriented assets, had greater potential to capture upside opportunities. For example, funds with tactical asset allocation strategies or diversified geographical and sector exposures may have mitigated bond market weakness and enhanced overall returns.
BlackRock Consensus 70 D
The BlackRock Consensus 70 D Fund is a moderately sized multi-asset fund with approximately £247 million in assets under management. Its portfolio consists entirely of holdings in other BlackRock and iShares funds, ensuring that all investments remain within the BlackRock ecosystem. While this structure provides streamlined management and potential cost efficiencies, it has, unfortunately, delivered underwhelming results for its investors, falling short of expectations in terms of performance.
Over the past year, the fund delivered a return of 12.63%, underperforming the sector average of 15.41%. Its 3 year return of 8.76% and a 5 year return of 22.68% also fell short of the sector averages of 9.2% and 29.07%, respectively.
Part of the reason for this funds poor sector ranking is due to its low end risk model with the funds equity weighting well below the sectors 85% limit, which puts it at a disadvantage against more adventurous, growth focused funds within the sector particularly during positive market conditions.
Fidelity MoneyBuilder Balanced Fund
The Fidelity MoneyBuilder Balanced Fund, also classified within the Mixed Investment 40-85% Shares sector, manages a modest £190.62 million in investor assets. It seeks to provide an income and to increase the value of investors' investments over 5 years or more.
At least 80% of the fund’s assets are dedicated to a combination of equities from UK companies and sterling-denominated investment-grade debt instruments, such as government and corporate bonds. With no reliance on a benchmark, the fund takes an active management approach, offering the flexibility to select assets across a wide range of industries and company sizes.
The fund’s performance has been notably underwhelming, with a 12-month return of 7.34%, which was half of the sector’s 15.41% average, ranking it 228th out of 228 funds in the sector. Its 3 year growth of 3.05% was also lacklustre compared to the sector average of 10.89%. Over 5 years, the fund returned 7.14% and again ranked at the bottom of its sector. These results highlight the fund's persistent challenges, positioning it as one of the weakest performers in the multi-asset funds range.
The fund underperformed due to its significant exposure to long-dated bonds, which are highly sensitive to rising interest rates. Furthermore, despite being a multi asset fund, it has a strong reliance on a single region, with equity investments predominantly focused on UK companies. This hindered its performance as the UK market has lagged behind global peers due to limited exposure to high-growth sectors and ongoing economic uncertainties following Brexit.
Multi Asset Funds: A Flexible Solution or a Compromise?
Multi-asset funds have become a prominent feature in the investment world, appreciated for their simplicity and built-in diversification. For many investors, they provide an easy, all-in-one solution that aligns with a predetermined risk model. Advisers often recommend these funds because of their adaptability and efficiency in managing risk, making them a flexible option for clients with varying financial goals and risk appetites.
However, their convenience and wide appeal come with significant drawbacks. A key issue is the protection level offered by the Financial Services Compensation Scheme (FSCS), which caps the protection amount per provider. This limitation can heighten the risk for investors who depend on multi-asset funds as their sole investment portfolio, instead of spreading their investments across multiple funds and fund management companies.
Related Article: Why Your Investments May Not Be Fully Protected
Additionally, multi-asset funds often underperform compared to bespoke risk-rated portfolios constructed from carefully selected, high-quality individual funds. This underperformance can raise questions about whether the simplicity they offer justifies the potential for reduced returns.
While these funds excel at offering easy access to a diversified range of asset classes, their success ultimately depends on the quality of their underlying holdings and the expertise of the management team. For investors prioritising superior performance or highly tailored strategies, multi-asset funds are unlikely the best option, making them better suited to those who value convenience and broad risk management over precision and optimisation.
Leading The Way For Investors
The development of Yodelar Investment portfolios come from years of research and analysis that include the consistent assessment of more than 100 fund managers, tens of thousands of funds and more than 30,000 investment portfolios.
Our research continues to identify that a small proportion of funds and fund managers consistently delivered top performance, with more than 90% of the portfolios we review containing funds that continually underdeliver. This research has enabled us to identify efficient processes and top-quality investments which we have utilised to create 10 strategically balanced, risk-rated portfolios that are built using only the top funds within each asset class and offer investors phenomenal potential for growth.
Yodelar provides a regulated whole of market advice and information service that is changing the way investors think.
Book a no obligation call with our team today and find out how we can help you grow your wealth efficiently.
