Multi-Asset Investing: Enhancing Portfolio Performance
Author: Charu Chanana, Chief Investment Strategist
Date: February 9, 2026
Key Insights
- Investors utilizing multiple product types have shown higher profitability compared to those focusing solely on one type, such as stocks.
- A diverse investment toolkit can mitigate risks, enhance decision-making during market downturns, and provide various performance avenues across different market conditions.
- Investors can start diversifying without a complete portfolio overhaul; even minor additions like ETFs, bonds, or commodities can be beneficial.
Understanding Multi-Asset Investing
Multi-asset investing is not merely about chasing returns; it focuses on constructing a portfolio that can withstand various market regimes, particularly during drawdowns. Saxo's client data over the past five years indicates that clients employing multiple product types tend to achieve better profitability outcomes.
Reasons for Improved Outcomes
- Smoother Investment Journey: A diversified portfolio reduces the impact of single market moves, helping investors avoid panic selling.
- Adapting to Market Conditions: Different market environments favor different asset classes; incorporating bonds or commodities can provide stability when stock performance falters.
- Reduced Concentration Risk: Portfolios focused solely on stocks may inadvertently concentrate on a few large-cap stocks or sectors, increasing risk. Diversifying can alleviate this issue.
- Encouraging Consistent Investment Habits: Utilizing ETFs and making regular contributions can promote disciplined investing, which is often more crucial than timing the market perfectly.
Common Myths About Diversification
- Diversification Equals Lower Returns: While it may limit extreme outcomes, the primary benefit is avoiding significant drawdowns.
- ETFs Are for Beginners: ETFs can represent a wide range of markets and strategies, not just basic investments.
- Bonds Are Irrelevant: Bonds serve as a stabilizing force in a portfolio, especially during equity market volatility.
- Commodities Are Only for Traders: Commodities can provide diversification benefits in specific economic conditions.
- Options Are Just Leverage: While some options strategies are leveraged, others can be used conservatively to enhance portfolio structure.
Starting Points for Stocks-Only Investors
Investors focused solely on stocks can consider the following options to diversify their portfolios:
1. ETFs
ETFs can spread risk across various companies and sectors, reducing reliance on individual stocks.
2. Bonds
Bonds can act as a shock absorber and provide liquidity during market volatility.
3. Commodities
Commodities can diversify portfolios, particularly during inflationary periods or supply shocks.
4. Equity Trading Options (ETO)
Collateralized options can introduce structured investment rules, such as covered calls or cash-secured puts, to manage risk.
Risks and Considerations
While multi-product portfolios may enhance resilience, investors should be aware of the following:
- Correlation does not imply causation; better outcomes from multi-product clients do not guarantee similar results for all.
- ETFs and bonds can still experience losses, especially in volatile markets.
- Commodities can be highly volatile and may not always provide the expected protection.
- Options carry significant risks and may not be suitable for all investors.
- Behavioral risks, such as overtrading or panic selling, can undermine the benefits of diversification.
Conclusion
The overarching message from Saxo's analysis is that portfolios with diverse investment strategies tend to be more resilient, leading to better long-term outcomes. Investors do not need to undertake a complete portfolio overhaul; simple steps like adding ETFs, bonds, or commodities can significantly enhance portfolio performance.