Multi-asset funds invest in a range of assets, countries and market sectors, diversifying your investment across many different asset classes.
The idea is that these different asset classes behave at least partly independently of one another, so that a drop in one asset class will not put all your investment in danger. For example, when equities drop in price, this may be offset by a rise in prices of alternative assets.
It also means you can leave all the managing and monitoring to the fund managers, who will adjust the asset allocation of the fund depending on what is happening in the markets.
Funds which specialise or concentrate their investment in specific regions, sectors (such as emerging markets or smaller companies) or in a smaller number of shares can result in greater fluctuations in value. Funds that invest in a wide range of sectors or shares generally carry less risk as they are well diversified.