What is a multi-asset capital preservation investment strategy?
A multi-asset capital preservation strategy’s primary aim is to prevent losses, maintain capital and keep pace with - if not beat - the rate of inflation. It aims to do this by adopting a conservative investment approach, and as a result, potential returns are likely to be lower than a strategy which invests in more risky assets. Generally, such strategies aim to achieve their goals through a flexible allocation to typically lower-risk investments, such as government bonds, as they seek to deliver favourable returns regardless of market and economic cycles.
Who can potentially benefit from a multi-asset capital preservation approach?
Capital preservation strategies are often favoured by retirees and/or those approaching retirement. They can typically afford to take a conservative amount of risk and are looking for a lower risk investment option that can still maintain their capital and potentially generate steady returns. In addition, a wealth preservation strategy can possibly be a valuable tool for investors looking for further portfolio diversification. As with any investment strategy, risk is involved. Investors may not get back what they invest and can be exposed to other risks, such as credit, counterparty and geopolitical risks. As such, multi-asset capital preservation strategies are best suited to those with a long-term time horizon.
AXA IM’s multi-asset approach to capital preservation
We use our expert knowledge and experience in risk mitigation to help meet our clients’ capital preservation objectives. We seek to achieve an effective level of investment performance, while preserving capital and helping to mitigate potential losses. Our range of asset classes, from equities to commodities, allows us to tailor solutions that can help both investors with a primary focus on capital preservation, as well as multi-asset investors seeking to offset market volatility and unexpected events by incorporating risk mitigation into a wider investment portfolio.
A triple-filtered approach to delivering long-term value
Our Multi-Asset team applies three filters to identifying potential investment opportunities.
- World Filter: We analyse approximately 150 proprietary signals to identify the primary influences at play, at any given time across global markets. These signals look at key market drivers including the macroeconomic environment, technical factors as well as valuations and overall investor sentiment.
- Conviction Filter: This is how we find the best potential investment opportunities. We identify the broadest and most effective universe of investment ideas across asset classes to build outcome-focused portfolios.
- Risk Filter: Managing risk is in our DNA. In an effort to deliver long-term value, we apply a multi-tiered risk filter - diversified and flexible allocation, ESG criteria and market exposure checks - to maintain the sustainability of our strategies.
Multi-Asset Investments views – April 2020 – COVID 19 crisis: we have reduced our exposure to risky assets as short-term risk are high
Reduction of equity positioning in the short term - Virus related slow-down in Q2 and Q3 of 2020 is pushing the global economy into recession. Earnings should fall heavily
Multi-Asset Investments views – February 2020 – The market is climbing a wall of worry
We continue to overweight equities as positive developments (Central banks easing, Phase 1 Trade Deal signature, Brexit ) release some pressure and should allow global growth to navigate a soft landi ...
Trade wars, Brexit and slowing global growth: Will volatility return to markets in 2020?
The past year has been a complex period, dominated by numerous challenges including the ongoing US/China trade war, protracted Brexit negotiations and slowing global growth.