I'm Andreas Zingg. I'm joined by my colleague, Mohneet Dhir. Today, we are going to talk about how to select multi-asset solutions. So let's start with you, Mohneet. Tell me what are selection criteria, what are things advisors should consider when they select a multi-asset solution? So there's quite a few things I think that are quite important when advisors are choosing multi-asset solutions for their clients.

One of the sort of key elements and the top one that I would point out is diversification. So when you're choosing an all-in-one solution, a multi-asset solution for your client, make sure that it is providing you maximum diversification that you can get and that can help you through volatile and uncertain market cycles. Often when you buy multi-asset all-in-one solutions, on the face of it, it may look diversified, but it's important to make sure that all the building blocks underneath are in fact providing you that broad level of diversification to different markets, to different geographies and other elements such as credit ratings and sectors, etc.

So we have diversification. I will add choice to the list. That's a good one. I think advisors should probably select from a provider who offers that choice when they like the philosophy of the asset manager. Reason being the preference of the end investors are different. The same is for advisors. Some advisors like active, some advisors like passive strategies.

So it's important that there is choice, active, passive, but also the wrapper, funds or model portfolios where the underlying building blocks can be seen. Yeah, absolutely, and I think that's also in line with client needs, for example, what does the client actually need in terms of preferences? And then I would add discipline I would say. Discipline is obviously very important.

Also, when you think about having, when there’s looking at a multi-asset all -in-one solution, it's important to make sure that the provider has a disciplined approach to managing that multi-asset solution. But also there's regular rebalancing, making sure that will make sure the product does what it's supposed to do, bringing it back to the sort of core asset allocation.

So it's up to me to count the things it seems. So we have diversification, choice and discipline. So the next one will be no surprise for investors and advisors who know Vanguard, it's cost. I would add cost to the mix. Our research clearly shows higher costs mean, on average a higher probability of a lower performance. And so cost is a key element, I think, when selecting multi-asset funds just to give investors the best chance for investment success.

It's important to say that that does not apply only to passive instruments. We also mean that with regards to actively managed multi-asset solutions. Yeah, I know, absolutely. So I would add strategic asset allocation or a more disciplined approach to asset allocation if you will. Strategic asset allocation, as many, many advisors will know, essentially means focusing your asset allocation on a longer term return objective.

From our perspective and as in support there's obviously a lot of research as well that points to the same same facts that I'm about to go over in a second, strategic asset allocation essentially ensures discipline in multi-asset portfolios. It avoids investors and advisors from making mistakes over the short term and making emotional decisions, if you will. Often people talk about tactical allocation, which is focused on decisions made based on short term market movements, and what that really does and what a lot of research shows is that actually it doesn't necessarily add to your longer term return objective, it actually takes away from it. So you may see some benefits over the short term, but actually over the longer term, it’s the sort of opposite. So that's another point for advisors to remember and for investors to know as well that strategic asset allocation is so important when you're thinking about a multi-asset solution is focusing on that long term return objective.

So we have now five factors that refer to the product or to the solution itself. But I would add to the mix is really the advisor support, what comes with the solution itself. And what I mean by adviser support is, for example, macro-economic views or webinars. I think we do webinars as well for advisors where we talk about performance of the markets, give macro-economic views.

I think it's also about the materials that comes with the advisor support partly end client approved materials, so the advisors can take the materials directly in end client conversations to help them understand what the solution is doing. So I think that's a very important additional element which comes on top of the product related considerations. No absolutely. And when you think about providers like Vanguard, the number of economists, the number of researchers that obviously work here and back all these multi-asset solutions is a huge plus in terms of the research that then gets passed on to advisors.

So I'll take over the responsibility of counting now. That’s very kind. To summarise, there are six key points that advisors should be mindful of when you're choosing multi-asset portfolios. The first one being diversification. Second one being choice. Third one being discipline. Fourth one being costs, which is making sure you keep your costs low so passing more return back to investors.

The fifth one being strategic asset allocation, focusing on that long term return objective, making sure you don't make any short term emotional decisions to change asset allocation. And the last one being advisor support and all the research that you get when you invest in an all-in-solution from a provider such as Vanguard. So we hope that you found the video useful and it will help you make better choices in terms of the multi-asset portfolio solutions that you choose going forward.

And thank you for listening in.