Multi-asset funds beat investor expectations, Prudential finds

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Research by Prudential has shown that multi-asset funds have beaten investors’ return expectations over the past three years.

A survey of more than 1,000 investors found they expected to see a minimum annualised return of 3.8 per cent on £5,000 invested in a multi-asset fund over the past three years.

However, the majority of multi-asset funds have outperformed this rate. Some 84.3 per cent of funds have made annualised returns of higher than 3.8 per cent since 2010 – with the average annualised return across all multi-asset funds being 5.4 per cent.

Prudential investment expert Paul Fidell says: “In this challenging economic environment, it’s perhaps not surprising that people’s expectations for their investment returns have become more modest.

“But it’s interesting to note that they’ve actually been overly pessimistic, as multi-asset funds have delivered average returns 42 per cent higher than investors’ minimum expectations.”

The survey also shows that 26 per cent of investors expect an annualised return of at least 5 per cent – which has been realised by 61.3 per cent of multi-asset funds.