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How do you assess multi-asset funds? A multi-asset portfolio is introduced to a
broader portfolio to provide top-down diversification. Because of that, the evaluation of a top down
or multi-asset portfolio needs to occur in two stages. The first step is evaluation exactly
like you would evaluate an equity or a bond portfolio. What’s the return and what’s
the risk that was taken to get that return, and whether or not the active management of
the portfolio actually contributed to the overall performance. But a multi-asset portfolio
has an important second component and that’s the diversification benefit that it brings
to the overall portfolio. A multi-asset portfolio often has significant
ability to influence the ability to capture upside returns and avoid downside movements
in the overall market and that’s something that needs to be evaluated. Did it capture
the upside and avoid the downside? And in that regard, what we’re really talking about
is the portfolio or the multi-asset manager’s ability to diversify the broader aggregate
portfolio.
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only and is not intended as investment advice nor is it a recommendation to buy or sell
any particular security. Any discussion of particular topics is not meant to be comprehensive
and may be subject to change. Any investment or strategy mentioned herein may not be suitable
for every investor. Factual information has been taken from sources we believe to be reliable,
but its accuracy, completeness or interpretation cannot be guaranteed. Past performance is
not indicative of future results. Information and opinions expressed are those of the presenter
and may not reflect the opinions of other investment teams within William Blair & Company,
L.L.C.’s Investment Management division. Information is current as of February 3, 2014
and subject to change without notice. Alternative investments may use investment
techniques and financial instruments that are considered aggressive and typically involve
a high degree of risk. Such techniques may include short sales or other strategies that
are intended to provide inverse exposure to a particular market or other asset class,
as well as leverage and may subject a portfolio to potentially dramatic changes (including
losses) in a portfolio’s value. Alternative investments commonly include the use of derivatives,
or investments where the investor does not own the underlying asset, but instead makes
a bet on the direction of the price movement of the underlying asset. Examples of derivatives
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as an instrument to hedge risk but also can be used for speculative purposes. There are
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investors who are willing to bear the loss of their entire investment and may not be
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