Five years of MyMap: Reassurance in an unprecedented era

Against a backdrop of volatility and regulatory change, a new generation of multi-asset funds has proven invaluable for financial advisers and their clients.

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Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

The UK investment market has evolved over the past five years, with both independent financial advisers (IFAs) and self-directed retail investors increasingly adopting risk-managed multi-asset portfolios.

Global assets under management in the Investment Association Volatility Managed and Mixed Asset sectors grew from USD $200bn at the end of May 2019 to $295bn at the end of February this year.¹

Alongside this, the new macro market regime we have entered – prompted by the Covid-19 pandemic, increased geopolitical tensions and the resulting inflationary environment – has led self-directed retail investors to reassess their portfolio allocations.

Many are keen to outsource portfolio management to asset management experts who are well placed to navigate this new environment. The popularity of multi-asset strategies has risen as a result – both for investors with an IFA and self-directed investors through digital platforms.

The latter category of service providers is flourishing. Digital investing is the fastest-growing wealth segment in the UK, with 9.5 million accounts open at the end of 2022 – up 39% since 2020.² UK investors are increasingly demanding simple and accessible investment management that meets their financial needs, be that through self-directed or professionally advised investing.

Challenging times for IFAs

Financial advisers and wealth managers have endured an increasingly difficult backdrop in recent years. Economic pressures and the Consumer Duty rules, along with other legislation, have created additional compliance pressures and work for advisers. While professional indemnity premiums have soared and advisory businesses have also seen day-to-day operational costs rise.

To counteract some of these pressures, many IFAs have been looking for ways to free up time to play to their strengths. They want to focus on providing personalised customer support that differentiates them from digital offerings. Outsourcing investment management to a third party can help. Rather than spending time calculating optimum equity and fixed-income allocations, or fine-tuning economic forecasts, advisers can instead focus on wider concerns of financial planning.

Risk-based multi asset funds

Risk-based multi-asset funds enable clients to diversify their portfolios while staying within risk-tolerance levels. This characteristic is proving increasingly popular with clients and their advisors, says Douglas Kearney at Intelligent Pensions: “We want resilience in difficult markets – an investment solution that could be proactive to changes in the market.”

Risk: Diversification and asset allocation may not fully protect you from market risk.

Risk-based multi-asset funds give advisers access to a range of investment funds. Outsourcing investment management into these funds brings several benefits for advisers:

• Multi-asset diversification: investments are made across a broad range of asset classes, which could help in reducing overall portfolio risk. 
• Cost effective: many funds are invested in value-for-money ETFs and index funds. This makes them significantly cheaper than other products managed by discretionary fund managers. Lower costs mean potential better net returns for clients.
• Tailored risk profiles: advisers can select funds according to clients’ risk profiles, goals and circumstances. These are then actively managed by fund managers to ensure consistent risk levels.
• Professional management: asset allocations can be adjusted to suit changing market conditions. This more active ‘hand on wheel’ approach could ensure the risk profile remains appropriate, in contrast to a ‘set-and-forget’ strategy.

Risk: There can be no guarantee that the investment strategy can be successful and the value of investments may go down as well as up.

Building a strong track record

BlackRock’s MyMap range of multi-asset funds have been designed to meet the needs of today’s advisers and wealth managers, and their diverse clients.

Ross Leckridge of IFA firm Aberdein Considine says MyMap keeps IFAs informed of changes to the funds. Even in opting for an active management style, he says that BlackRock helps them understand “the decisions that are being made and why they’re being made,” adding: “We understand the strategy. We believe in the strategy.”

Five years of strong returns³, despite a challenging economic backdrop, demonstrate that this approach not only works in theory, but in practice, too. The graph below shows how £20,000 invested in various MyMap funds compares to £20,000 left as cash savings over a five-year period.