Investment manager 7IM has revealed that its Pathbuilder fund range has passed £500m in assets under management (AUM) after more than doubling over the past 12 months.

It stated that the increased demand reflected a growing interest in differentiated and diversified approaches, which 7IM uses in long-term asset allocation.

Advisers are looking to blend pure market-cap weighted portfolios with other approaches amid concerns about the dominance of US markets in these portfolios, according to the investment manager.

Looking at the relative returns of the Nasdaq, S&P 500, and global equities excluding the US over the past decade, it found that while US markets, especially the Magnificent 7 tech stocks, had delivered exceptional returns, the gap has begun to narrow.

7IM’s Pathbuilder portfolios are built using its strategic asset allocation process that has been running since 2003.

This prioritises diversification through analysis of statistical factors, rather than just return expectations, resulting in Pathbuilder portfolios consisting of a wider range of sectors and regions across equities, bonds and currencies.

Furthermore, alternatives are a “key specialism” for the investment manager and are worth considering when they can be accessed at a reasonable price, according to 7IM.

While it has been a positive few years for US equities, 7IM believed that it was becoming clear that advisers were looking for something a bit different with a solid process behind it.

“With the relatively mixed performance of large-cap US equities year-to-date, planners are increasingly telling us they’re looking for low-cost solutions to blend with more US-centric offerings,” stated 7IM co-chief investment officer, Matthew Yeates.

“Assets in the Pathbuilder range have doubled over the past year, and we expect that momentum to continue.”

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