Premier Miton

Premier MitonMulti-Asset

Perspectives – Indexation is shifting risk to advisers and can be harmful to clients

Premier Miton's David Jane argues that passive index funds in the multi-asset space do not eliminate asset allocation risk but instead transfer it from fund managers to financial advisers, who may not recognise they are making active allocation decisions. The piece further contends that fixed-weight rebalancing strategies are damaging in trending markets—particularly for bonds in an inflationary environment—as they systematically buy falling assets to restore target weights.