Why multi-asset funds are back in fashion—and what it means for Asia-Pacific investors

Over the past twelve months, multi-asset funds have experienced a significant resurgence. A combination of rising market volatility, shifting macroeconomic dynamics, and changing investor needs has revived interest in this diversified investment strategy.  Particularly across Asia, including Japan, Hong Kong, and Australia, funds are rediscovering the value of multi-asset portfolios as they seek to mitigate uncertain markets and capitalize on opportunities across various sectors.  Much of this investment is being directed toward Europe, which over the past year has provided diversification and a wide range of trading opportunities across asset classes.  Mathieu Fuhrmann“To understand the recent growth of multi-asset funds, it’s helpful to look back to 2022-2023. For a long time, equities and interest rates were largely uncorrelated, allowing investors to hedge their equity exposures with interest rates. However, since 2022, this relationship has started to break down, and the correlation between interest rates and equities has gone sideways.” Mathieu Fuhrmann, Head of APAC Sales at EurexAs a result, investors have sought alternatives that can provide resilience in volatile markets and generate returns that are uncorrelated with equity markets.  Since Trump's re-election, U.S. equity markets have become significantly more volatile, ending the bull run that benefited long-only equity funds in recent years.  So far this year, equity markets have experienced significant downturns, driven by events such as the release of DeepSeek and related concerns over U.S. tech valuations, as well as tariff disputes and the resulting unprecedented market movements. These events contributed to refocusing the emphasis on well-diversified portfolios for both protection and income. Most multi-asset portfolios are built on four key pillars: equities, fixed income, credit, and a fourth pillar that may include a variety of asset classes such as real estate, FX, or volatility trading.  Equity: the foundation  Equity markets remain the foundation of portfolio construction for multi-asset firms; however, their geographical focus has shifted over the past year. Investment in Europe has rebounded significantly, driven by bullish sentiment across the continent, fueled by several key factors. Most notably, Germany, the powerhouse of the European economy, is pursuing a growth agenda supported by fiscal stimulus.  This marks a departure from the highly fiscally conservative approach of recent decades and is driving renewed interest in German and broader European equities. The DAX® is among the best-performing indexes this year, and Europe’s weighting in multi-asset portfolios is climbing as a result. Indexes such as the EURO STOXX 50® and STOXX® Europe 600 are also gaining traction. “In addition to the EURO STOXX 50® and the STOXX® Europe 600, we are also seeing Asia trading MSCI World, due to significant improvements in the order book liquidity,” says Fuhrmann.  “Interest is coming particularly from multi-asset funds in Asia that previously traded a basket of S&P 500, EURO STOXX 50® and the Nikkei. They are now looking at MSCI World, as it enables them to trade the full basket of the three contracts with a single execution fee. Since everything is denominated in USD, there is no need to worry about currency exchange risks. And, because it is a total return index, the dividends are included in the contract and do not need to be equitized.”Fixed Income: trading pan-European exposures Fixed income is the second core pillar of multi-asset investment strategies, and once again, Europe is providing significant opportunities for firms. As with equity markets, Germany’s fiscal stimulus is reshaping the European landscape, putting upward pressure on yields. We have observed the German 10-year yields jumping by 0.3 percentage points over the course of a week. We have not seen this kind of volatility since the 1990s. On the other hand, discussions surrounding the ECB rate cut and potential weaker growth in the rest of Europe were aimed at capping the yield surge. At the same time, country-specific spreads were widening, creating additional volatility and opportunities.  This comes as auctions for long-term maturities in the U.S. and Japan have experienced decreased demand, and investors are beginning to view Bunds as a viable alternative to Treasuries. To meet the growing demand for trading European fixed income exposures, Eurex will launch EU bond futures in September 2025, providing investors with a new tool to trade European fixed income exposures of eight to twelve years.  “The EU bond futures will benefit from robust market-maker support from launch, providing liquidity and tight spreads,” says Fuhrmann. “These contracts will complement the short-term interest rate (STIR) products on Eurex, such as the €STR contracts, to offer a range of options for multi-asset funds. “STIRs on Eurex are gaining momentum, with daily turnover continuing to grow. We have also seen equity and multi-asset managers utilize STIR contracts for cash replication. Meanwhile, the clearing of OTC interest rate swaps at Eurex offers compelling advantages to clients already active in the exchange's listed fixed income contracts–providing access to margin, capital and collateral efficiencies, for example through margin offsets between Eurex fixed income futures and cleared OTC EUR interest rate swaps.  Following the introduction of EMIR 3.0 in December 2024 and the publication of the final regulatory technical standard in June 2025, Eurex continues to see strong growth in EUR-denominated OTC interest rate derivatives (IRD), with notional outstanding across all OTC instruments reaching a new all-time high of EUR 43.4 trillion in June 2025—up 23 percent year-on-year.Credit: The new shiny star Credit is perhaps the fastest-growing component of the multi-asset world. Once overlooked in favor of equities and fixed income, credit is now attracting increased interest from multi-asset firms that want to access assets with attractive yields and low volatility. Eurex has launched a suite of credit index Futures, referencing U.S., European and emerging markets. The Futures provide easy-to-access, efficient and centrally cleared alternatives to OTC derivatives like total return swaps or credit default swap indexes. Investors can benefit from cross-margining with rates on Eurex, thereby reducing capital costs for funds.  “We are seeing growing interest from Asia in trading European credit. There is strong demand for both high-yield and investment-grade credit exposure in the U.S. and Europe, and our credit futures are well-positioned to capitalize on that demand,” says Fuhrmann. "We have also seen some investors preferring to gain exposure to European credit spreads as opposed to those in the U.S. The risk-adjusted returns are just better in Europe, we have been told.” FX, real estate, and volatility The fourth pillar of multi-asset funds allows for flexibility and tactical diversification. Each sub-asset class—FX, real estate, and volatility—plays a unique role in a portfolio.  In European markets, investors are shifting FX exposure from OTC to listed environments for cost savings and margin efficiency. At the same time, interest is growing beyond EUR/USD into cross-currency pairs involving other major currencies. “Europe has been an outperformer when it comes to FX, with the euro up 13 percent against the dollar so far this year,” says Fuhrmann. “While the USD will continue to play a prominent role going forward, the past discount on the euro’s valuation has diminished, and it's likely to continue outperforming the USD this year.” “Another popular exposure within multi-asset funds today is real estate. On Eurex, futures such as the EURO STOXX® Real Estate and FTSE EPRA Nareit indexes offer differentiated exposure compared to traditional equities, fixed income, and credit. Demand for these contracts is growing in Japan, Australia, and across Asia,” says Fuhrmann. As volatility returns to markets, investors are also rediscovering volatility trading and its value both for yield generation and hedging. EURO STOXX 50® Options, DAX® Options, STOXX® Europe 600 Options, EURO STOXX® Bank Options and VSTOXX® Futures have seen strong volume growth as a result.  Options on MSCI World and MSCI EM are also gaining increased attention. Their implied volatility profiles differ from those of the S&P 500, offering cost-effective tail-risk protection for globally diversified portfolios. Asia-Pacific: Growing ambitions among multi-asset firms The Asia-Pacific region is playing an increasingly central role in the global growth of multi-asset trading, with growing activity across the region, from Japan to Australia.  As global volatility remains elevated and Europe continues to outperform other markets, investment in Europe by multi-asset funds in APAC is likely to continue growing.  Eurex is expanding its offerings across the four key pillars to ensure it is well-positioned to capture this growing demand and provide opportunities for multi-asset firms across the APAC region and globally.Weiter zum vollständigen Artikel bei Deutsche Boerse AG Unsponsored American Deposit Weiter zum vollständigen Artikel bei Deutsche Boerse AG Unsponsored American Deposit