Report on multimanager and market volatility Quentin de Viron from Flexam Fund in Belgium, Paolo Maggioni from AIB Investment Managers in Ireland, Lars Kolbe from StarCapital in Germany and Anne Delon from Fideas Capital in France share their views.

What is the main advantage of the multi manager approach when it comes to market volatility?

The sum of the volatilities is not equal to the volatility itself! When people are aware of this fact: they realise that Multi manager, multy-Style approach is an excellent way to reduce part of the volatility in a portfolio.

In fact: It’s the decorelation of Fund manager in a portfolio which give you a good way to reduce the risk.

Selecting and investing in very different Style of Fund manager is the corner Stone. (Quantitative, Long/Short, Global Asset allocator, Value Bias etc..)

What are you doing to mitigate market volatility?

Probably the best way to reduce the impacts of market volatility is to have the right asset allocation at the right time. It is quite a challenge to find the right asset allocation but is what we do at Flexam Fund selecting flexible asset allocator and liquid Newcits Fund that proved their good asset allocation process in the past.  In fact, we compose a portfolio of Fund managers who have the ability to adjust their investment to market volatility with the objective to provide a vehicle adapted to various market trend.

We always keep in mind that fighting volatility is not killing the volatility. In fact: we need the good part of the volatility to make returns. My view is that volatility creates opportunities if you have enough investment strategy in this environment.

Which fund or fund managers do you think offer the best protection from the market volatility?

Long / Short market neutral Fund & Fund manager offer a good natural protection from market volatility. Their objective is by nature to neutralize the beta of the market.

But of course in a steady growth market with low volatility you have to accept to lose potential returns.