Multi-asset funds | Barclays Smart Investor (2024)

Diversifying your portfolio involves spreading your investments across a range of different asset classes. The aim is to balance the level of risk so that a loss suffered by one asset doesn't have a disproportionate impact on the overall performance of your portfolio.

Find out more about diversification

If you're new to investing or you don’t have much time on your hands, multi-asset funds can help you diversify your portfolio.

How a multi-asset fund works

As the name suggests, a multi-asset fund invests in a variety of asset classes. While some funds may, for example, only invest in shares or bonds, a multi-asset fund will typically hold both of these, as well as property, cash and potentially even alternative assets, such as gold.

Pros and cons

The main benefit offered by a multi-asset fund is that you hand responsibility for how your money is invested and diversified to a fund manager, who you then rely on to make the right investment decisions.

By investing in one fund, which holds several different assets, you can effectively spread your risk. In theory, the performance of the strongest assets should offset the performance of the weakest, leading to steadier overall returns.

However, if one asset performs exceptionally well, you miss out on the returns that you would have enjoyed if you just invested in that particular asset. It's important to appreciate that, no matter how much you diversify, your investments can still fall in value and you may get back less than you invest.

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The value of investments can fall as well as rise; you may not get back what you invest. If you’re not sure about investing, seek independent advice. Tax rules can change and their effects on you will depend on your individual circ*mstances.