For years, savvy investment managers have relied on multi-strategy and multi-asset portfolios to navigate market turbulence and deliver consistent returns.
Citing research from FTSE Russell, the CFA Institute reports that multi-asset assets under management (AUM) grew from under $2 trillion in 2003 to approximately $16 trillion in 2023, a testament to the rising popularity of diversified investments.
Now, as markets enter a new wave of heightened volatility and uncertainty, portfolio managers face increasing pressure to meet investor expectations by effectively managing, scaling, and delivering multi-strategy, multi-asset portfolios.
In this post, we examine the driving forces behind this shift—and how technology is equipping investment managers with the resilience and adaptability necessary to pursue alpha in increasingly complex markets.
Top 3 Market Trends Fueling Demand for Multi-Strategy and Multi-Asset Portfolios
Multi-strategy and multi-asset portfolios are often used interchangeably, but they represent distinct approaches to diversification. Multi-strategy portfolios diversify by employing a variety of investment techniques, while multi-asset portfolios spread capital across different asset classes, each with its own risk and return profile.
Investment managers are increasingly embracing both approaches in response to today’s market turbulence. Here are key trends driving this shift:
Heightened Market Volatility and Uncertainty
From persistent geopolitical tensions and trade disputes to abrupt macroeconomic shifts, today's environment is marked by widespread uncertainty. Investors are understandably gravitating toward portfolios that can weather volatility.
Multi-asset and multi-strategy portfolios reduce reliance on any single market driver. By employing multiple investment strategies and spreading exposure across various asset classes, including equities, fixed income, commodities, alternatives, and private markets, managers can mitigate downside risks and stabilize returns in unpredictable market conditions.
Declining Confidence in the 60/40 Portfolio
For decades, the 60/40 portfolio (60% equities, 40% bonds) was the gold standard for balanced investing. The premise was simple: when equities fall, bonds rise, cushioning the impact.
But 2022 challenged that assumption. Equities and bonds began moving in tandem—both declining—undermining the core diversification logic of the 60/40 model. Since then, investor confidence in traditional asset allocations has eroded.
As a result, interest has surged in multi-asset and multi-strategy approaches that incorporate alternatives, real assets, and active management to enhance diversification and resilience.
Growing Demand for Diversified, Uncorrelated Return Streams
Investors today are no longer satisfied with portfolios driven by a single "beta"—such as equities or fixed income. They increasingly recognize the limitations of market-dependent returns and are looking for uncorrelated, actively generated performance.
This evolution places the portfolio manager in a more dynamic role—as allocator, strategist, and risk manager. By integrating multiple strategies and risk factors, managers can build portfolios that aim to generate consistent, risk-adjusted returns, regardless of market direction.
Sleeve-Based Structures Streamline the Complexity of Diversified Investment Strategies
As they accommodate the growth in multi-strategy and multi-asset approaches, portfolio managers increasingly adopt sleeve-based structures to organize these investments.
These “sleeves” represent strategy-specific allocations—either housed within a single custodial account or spread across multiple accounts—and are integrated to form a unified household portfolio.
Sleeve-based structures not only support diversification but also make it easier to deliver and manage multi-strategy or multi-asset portfolios—while offering operational and reporting benefits to investors, including:
- Fewer account statements and administrative burdens
Simplified paperwork improves client experience and reduces confusion. - Lower custodial fees
Consolidating assets across strategies can help minimize account-level charges. - Streamlined tax reporting
A unified account structure simplifies the preparation of tax documents. - Consolidated reporting
Investors receive a single, comprehensive view of all strategies and holdings. - Greater transparency
Clear visibility into asset allocation and risk exposure improves client confidence and communication.
With the right technology, organizing complex portfolios into clearly defined sleeves gives managers operational control to provide investors with the clarity they need.
Technology that Empowers Investment Managers to Successfully Construct and Manage Multi-Strategy and Multi-Asset Portfolios
Successfully designing and managing multi-strategy and multi-asset portfolios requires investment managers to reevaluate their technology.
Advent’s Genesis platform offers a seamless end-to-end solution for building, managing, trading, and accounting for multi-strategy and multi-asset portfolios.
With an innovative, unified data layer that streamlines operational complexity, Genesis empowers investment managers to construct and manage diversified, adaptive portfolios with greater ease and precision. This includes the ability to implement strategic adjustments at scale without overburdening operations teams.
Leverage multi-asset front office functionality to automate low-touch flow, gain insight into best execution, adapt strategies with real-time TCA, and centralize multi-asset liquidity.
Sleeve-level accounting flows seamlessly from the middle and back office to the front office. It also simplifies the performance attribution of each strategy or sleeve, helping firms stay agile in a demanding market.
With Advent, portfolio managers gain holistic insights—whether they’re tracking multiple strategies within a single portfolio or overseeing portfolios tied to a particular investment approach.
Firms using Genesis report improved decision-making, stronger client service, and better agility in dynamic markets. Listen to one client’s feedback or request a demo to learn more about our solution.
