Savings vs multi-asset
Savings accounts typically offer 100% capital guarantee (the level of capital protection depends on local regulations and deposit protection schemes) and ease of access. However, if interest rates are low, or are being outpaced by inflation, savers could be in a tight spot and have to make their money work harder to generate a real return. Holding or moving to cash will help avoid short-term stock market volatility, but it means you might lose out on any potential market gains over the long term. As you can see in the return example, multi-asset funds may stack up when it comes to returns over a long time period.
Savings
For short-term goals, the general rule is to save into cash deposits, like bank accounts
2020
$50,000
Invested in savings account
2025
$57,295
Annualised rate of return of 2.76%
Multi-asset
For longer-term goals, you may want to consider investing with multi-asset funds because inflation can seriously affect the value of cash savings over the long term.
2020
$50,000
Global multi-asset portfolio
(for illustrative purposes only)
2025
$70,779
Annualised rate of return of 7.20%
| Discrete performance (%) | 01/05/2020 - 30/04/2021 |
01/05/2021 - 30/04/2022 |
01/05/2022 - 30/04/2023 |
01/05/2023 - 30/04/2024 |
01/05/2024 - 30/04/2025 |
|---|---|---|---|---|---|
| MA Portfolio - USD | 25.40 | -5.73 | -0.60 | 9.30 | 10.22 |
| USTREAS Federal Funds | 0.08 | 0.11 | 3.24 | 5.50 | 5.00 |
Global multi-asset portfolio (USD) included Global bonds (35%): Bloomberg Global Aggregate. Global equities (50%): MSCI ACWI Property (10%) S&P Global Property. Alternatives (3%): HFRX GLE. Cash (2%) USTREAS Federal Funds. Rebased in US dollars where appropriate, i.e. all index returns are recalculated based on exchange rates to give returns for a dollar investor. Source: Morningstar Direct, 5 years to 30 April 2025.
© 2025 Morningstar. All Rights Reserved. The information, data, analyses and opinions (“Information”) contained herein: (1) include the proprietary information of Morningstar and its content providers; (2) may not be copied or redistributed except as specifically authorised; (3) do not constitute investment advice; (4) are provided solely for informational purposes; (5) are not warranted to be complete, accurate or timely; and (6) may be drawn from fund data published on various dates. Morningstar is not responsible for any trading decisions, damages or other losses related to the Information or its use. Please verify all of the Information before using it and don’t make any investment decision except upon the advice of a professional financial adviser. Past performance is no guarantee of future results. The value and income derived from investments may go down as well as up.
Savings AND multi-asset funds
We believe that over the long term, investing and saving can complement one another. For many people, this combination is potentially a way to achieve their long-term financial goals. And if you do decide to invest remember one thing above all: diversification can help spread the risk to your capital. Don't put all your eggs in one basket.
Past performance is not a guide to future performance. The value of your investment and any income can go down as well as up and you may not get back what they originally invested. Fund charges that would be payable are not included and when included would have the effect of reducing the performance shown.
Using multi-asset funds to get started
A diverse range of assets
Multi-asset funds can give investors exposure to a broad range of asset types. You can further increase this ‘diversification’ by blending geographies and sectors.
Potential for smoother returns
Asset classes don’t tend to fall in value at the same time. So multi-asset investors are, to some extent, more insulated from the highs and lows of individual asset markets.
Ongoing expert monitoring
Generally, multi-asset investing comprises complex asset allocation decisions supported by risk-reduction strategies by a team of experts who collaborate to search for the best mix for your investments.
Targeting outcomes
Selecting a multi-asset fund that matches your attitude to risk can be a good tool to help investors achieve their financial outcomes while ensuring they do not take on more risk than they are comfortable with.
Simple to understand
And finally, multi-asset funds package a diversified, complex portfolio balancing risk and reward, but presented in a simple-to-understand way.
More articles from our New to Investing mini-series
Investment goals
Setting financial goals for investors lets them focus on decisions that will help their overall objectives, rather than monitoring the outcomes for a range of individual investments.
Understanding risk
For investors, risk is the chance that a particular outcome or financial gain differs from its expected outcome or return. It is important to realise that risk is an inherent part of investing and shares a fundamental relationship with returns: the more risk an investor is prepared to take, the greater the level of potential returns.
What is a fund?
A fund is a type of investment that starts with a pool of investor capital, deployed by a fund manager according to a set of financial goals, providing access to a very wide range of investment opportunities, both broad and specialised.
Asset classes explained
Asset classes are groupings of investments that have similar financial characteristics. Each asset class carries its own set of risks and rewards.
Why invest globally?
Only investing locally means missing out on opportunities offered by global markets. Better diversification, more investment options and reduced volatility are among some of the reasons investors should consider investing globally.