A Mixed Assets Fund invests primarily in a mix of bonds and equities. Mixed Assets Funds have different risk levels, depending on the allocation between equities and bonds. Generally, the risk lies somewhere between the risk of a Bond Fund and an Equity Fund. Other core assets classes include cash, real estates or even commodities.
Portfolio managers will conduct extensive research on the markets and companies coupled with the historical averages for different asset classes’ returns and utilise different investment strategies to determine the right mix of asset classes for the fund. The right mix may be to hold a very high percentage of bonds (income-seeking investors, retirees) or to invest primarily in small-cap equities (capital-appreciation/aggressive-growth funds).
In deciding on a suitable fund to invest in, there are many factors to consider including quantitative factors such as Sharpe Ratio, Expense Ratio and Historical Performance of the Fund and qualitative factors such as fund Strategy, Idea, Fund leadership and Structure.
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