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​This Month’s Fund in Focus 

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BNY Multi-Asset Moderate

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Three Years Old, Platinum Rated, and Growing Up Nicely

There are some fund anniversaries that pass with little more than a date on a factsheet. This one deserves considerably more attention.

The BNY Multi-Asset Moderate Fund is celebrating its third birthday this month, and we think that provides the perfect opportunity to make it our latest Fund in Focus.

We have been strong supporters of the wider BNY multi-asset range for some time. Strategies from the range are important building blocks within our Flagship portfolios because we believe Newton brings together many of the characteristics we want from a genuinely active multi-asset manager: experienced investment teams, substantial research resources, flexible asset allocation and an investment process that places as much emphasis on managing risk as it does on identifying return opportunities.

However, this month is specifically about BNY Multi-Asset Moderate.

Three years matters. It marks the point at which a relatively young strategy begins to develop a sufficiently meaningful live track record for investors and researchers to examine not simply what the managers said they intended to do, but how the portfolio has actually behaved through different market conditions.

And, after completing that assessment, we have awarded the fund our Platinum rating, QuantQual’s highest rating.

Why Do We Rate It So Highly?

At its heart, BNY Multi-Asset Moderate is designed to achieve long-term capital growth without requiring investors to accept the degree of equity-market exposure associated with more adventurous strategies.

That sounds straightforward. Doing it consistently is considerably harder.

What impresses us is the flexibility Newton has within the portfolio. This is not simply an equity allocation sitting alongside a predetermined bond allocation. The managers can consider opportunities across equities, fixed income, convertibles, currencies, geographies and different parts of the capital structure, adjusting the portfolio as valuations and prospective risk and reward change.

That freedom is particularly valuable within a moderate strategy. Equities can remain an important engine of long-term growth, while bonds, cash and other diversifying exposures can make a meaningful contribution to portfolio resilience. The objective is not to remove volatility, which no genuinely invested portfolio can do, but to create a better-balanced investment journey in which returns are not dependent upon one market or one economic outcome.

Three Years of Evidence

The third anniversary is also important because we can now look beyond the investment proposition and examine a full three-year period of live performance.

Over its first three years, the fund has delivered a cumulative return of 33.12%.

Performance alone, however, is never enough for us to award a Platinum rating.

Our research process considers how returns have been generated, the risks taken to achieve them, the quality and experience of the investment team, portfolio construction, downside behaviour, diversification, repeatability of the process and our confidence in what is likely to happen next. Quantitative analysis is therefore the starting point rather than the conclusion of our research.

It is that combination of quantitative evidence and qualitative conviction that gives us confidence in BNY Multi-Asset Moderate.

Why It Matters Now

The current investment environment also provides a particularly interesting backdrop for a strategy like this.

For much of the period following the Global Financial Crisis, exceptionally low interest rates made the defensive side of a traditional multi-asset portfolio considerably less useful. Today, fixed income once again has the potential to provide both meaningful prospective returns and genuine diversification alongside equities. At the same time, differences in valuations, interest rates and economic conditions around the world are creating opportunities for active managers willing and able to move capital as those opportunities change.

For a moderate investor, that matters. There is no need to make an all-or-nothing decision between pursuing growth and protecting against risk. A properly diversified multi-asset portfolio can seek participation when markets rise while maintaining assets capable of providing greater resilience when conditions become more difficult.

That is precisely the role we believe BNY Multi-Asset Moderate can perform.

Happy Third Birthday

Perhaps the strongest compliment we can give the fund is that we do not see it as an isolated success.

It sits within a BNY multi-asset range that we rate extremely highly and already trust sufficiently to use as building blocks within our own Flagship portfolios. The Moderate strategy occupies an especially useful position within that range, providing meaningful growth exposure while retaining considerably more emphasis on diversification and capital resilience than an equity-dominated solution.

Three years ago, investors were being asked to place confidence in a relatively new strategy backed by an established investment process and substantial resources.

Today, there is something more.

There is a three-year live record to examine, an increasingly established portfolio, a team and process in which we have considerable conviction and, following our latest research, a QuantQual Platinum rating.

So this month we are doing more than naming BNY Multi-Asset Moderate our Fund in Focus.

We are wishing it a very happy third birthday.

And, at three years old, we think it is only just getting started.

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