Mayell (pictured), a managing director of portfolio management at the firm, says she is surprised by the lack of interest many investors and advisers show in these vehicles, given there is such a demand for income in the low-interest rate environment.
"Everywhere else, multi-asset income funds are selling like crazy, whether it is speculative investors in Asia or more conservative investment in Europe and the US, but for some reason they haven’t caught on over here," she said. "Some people might be worried about duration risk, some about equity valuations, others about emerging markets, so it makes sense to be in a fund that has the maximum breadth and flexibility to move in and out of assets at different times."
"In the UK, investors like to be a bit more specific and hold UK equity income funds or strategic bond funds if they’re feeling particularly adventurous, but I think it makes sense for them to be in something much broader that can gets its income from a number of different sources."
Mayell believes UK investors are overly reliant on their domestic market, and should look to more internationally focused strategies to complement their core holdings.
"I think most investors around the world have a domestic bias, but I think it has always been the strongest in the UK," she said.
"Someone like Neil Woodford does a fantastic job in his field and he has been the go-to manager for investors who want UK Equity Income exposure, for good reason."
"However, you’ve got to be careful not to put all your eggs in one basket. High yielding equities is a small market to choose from."
Mayell points to the JPM Multi Asset Income fund as a good example of one that generates its yield from a number of areas.
"It only has 5 per cent in UK equities at the moment, so it has little overlap with UK investors’ core holdings," she explained. "It holds preference shares, convertibles, mortgage-backed securities, global equities, a bit of high-yielding debt and so-on."
"With the world as it is at the moment, with uncertainty everywhere, you need plenty of sources to draw on," she added.
Mayell says the fund does not hold property or infrastructure at the moment, due to worries over valuations in the former, and valuations in the latter.
"The fund has been selling down its little exposure to emerging market equities and debt recently, and high-yielding debt has also come down, from around 50 per cent last summer to 20 per cent now," she added.
"We like convertible bonds and preference shares at the moment, and equities in Europe and the US as well."
JPM Multi Asset Income has a number of onshore and offshore versions, with total assets under management (AUM) growing from $4bn at the end of last year to $15bn today. Mayell confirms that the vast majority of these inflows have come from outside the UK.
According to FE data, the UK-domiciled fund has returned 49.1 per cent since it was launched back in June 2009, beating its IMA Mixed Investment 20%-60% Shares sector by 14.15 percentage points.
Performance of fund vs sector since launch
Source: FE Analytics
The fund has an unusual structure in that it draws on the ideas from managers running various portfolios at JPM, but rather than holding their portfolios like a fettered fund of funds, it invests directly in the same stocks and shares.
"This keeps down the fees, and also makes it easier to manage as the managers know exactly what they’re holding," said Mayell.
"It typically has around 1,000 holdings, so it’s very diversified."
JPM Multi Asset is run by Michael Schoenhaut and Talib Sheikh. It requires a minimum investment of £1,000 and has an ongoing charges figure (OCF) of 1.43 per cent.
It is currently yielding 4.54 per cent.
There are a number of top-rated multi-asset income funds available to retail investors in the IMA universe. Perhaps the highest profile of these is Jupiter Merlin Income – a fund of funds that has beaten its IMA Mixed Investment 20%-60% Shares sector average in each of the last 13 calendar years.
This has translated in to some very strong cumulative returns over the long-term, as the graph below shows.
Performance of funds vs sectors over 10yrs
Source: FE Analytics
Jupiter Merlin Income is the only fund in the IMA universe that is headed up by three FE Alpha Managers. It requires a minimum investment of £1,000, has an OCF 2.36 per cent and is currently yielding 3.3 per cent.
Among the other multi-asset income funds that score highly in FE's ratings are the five crown-rated Ecclesiastical Higher Income fund, which is headed up by FE Alpha Manager Robin Hepworth.
The £211m fund, which is currently yielding 4.43 per cent, has comfortably beaten its IMA Mixed Investment 40%-85% Shares sector average over 10 years.
Hepworth’s fund has an OCF of 1.33 per cent and is available for a minimum investment of £200.
The five crown-rated IM Matterley Regular High Income fund is a good prospect for cautious investors who want to be paid a dividend quarterly. It sits in the Mixed Investment 0%-35% Shares sector, meaning it can only have a maximum of 35 per cent in equities.
It is the cheapest of all the funds mentioned here, with an OCF of just 1.11 per cent.