Multi Assets

The goal of these funds is to provide income and/or growth within a predetermined volatility range. In accordance with the investor's risk tolerance, managers use a variety of asset classes to balance risk and return. A low-risk investor, for example, would choose a "conservative" fund; higher-risk investors would choose "moderate," "aggressive," or "growth" target risk funds.

Investors seeking consistent payouts or distributions may find these funds to be a useful addition to their portfolios. These payouts could come only from bonds, dividends, or a mix of several asset classes. They can be set up to pay out solely the profits on the investments, or they can be set up to pay out variable distributions, which occasionally entail a return of capital.

Rather than investing directly in stocks or bonds, a "fund of funds" is a mutual fund that usually invests in 10–20 other mutual funds or exchange-traded funds (ETFs) from other asset classes. These funds provide one mutual fund structure multi-asset benefits comparable to those of a model portfolio. A portfolio construction specialist oversees ongoing allocations, which are managed inside the mutual fund framework.