When it comes to being passively managed, not all multi-asset funds are created equal.

Some funds track market capitalisation indices - that is, they track indices made up of shares or bonds in line with the amount invested in those shares or bonds in the market.

Funds that track market capitalisation indices are often said to track vanilla indices - and these will always give you a bit less than the market return after fees.

Other funds make use of enhanced passive strategies or smart beta that is designed to outperform the market.

For example, a smart beta fund may track a factor index that is designed to mimic the value style of investing by identifying typical value shares through characteristics such as a high dividend yield or low share price relative to the book price of the company.

Some funds, like Satrix's Smartcore, use what is known as a multi-factor approach, identifying shares that will deliver for more than one factor.

Many multi-asset funds are managed to a static asset allocation - the allocation to shares, bonds, listed property or cash never changes.

Some multi-asset funds, like Sygnia's Skeleton Balanced 70, 60 or 40 funds, make use of tactical asset allocation: the manager changes the asset allocation mix in line with its views on which asset class is likely to deliver the best returns.

Enhanced passive funds and those that use tactical asset allocation, may, but do not always, have higher fees than those that do not. They also expose you to more risk of earning a return that differs from that the market will deliver.

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