Insurers wary of capital 'uncertainty' in multi-asset funds

The risk of volatile capital requirements and the complexity of keeping track of underlying portfolios are deterring some insurers from investing in multi-asset and absolute return funds

If it sounds too good to be true, it probably is. That is the logic some European insurers are applying to multi-asset funds, many of which promise low capital charges and low volatility, but also high returns.

The fund managers that run them say multi-asset funds are so well balanced they can ride out market volatility and also benefit from Solvency II rules that favour risk diversification.

Since the launch by Standard Life Investments of the well-known Global Absolute Return Strategies fund