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Special Report

Multi-Manager Funds - April 2012

Published by Investment Adviser | Apr 30, 2012

Multi-manager funds, once perceived by advisers and their clients as being an unnecessary expense, have become the must-have item in the majority of investment portfolios and investment houses’ product ranges.

Standard Life Investments was the latest to launch two suites of such products – its MyFolio funds – at the start of this year.

In February the range added Multi-Manager Income and Managed Income portfolios, prompted by demand from investors seeking reasonable prospects for capital growth, higher yields and risk controls in line with specific parameters.

Bambos Hambi, head of fund of funds management at Standard Life Investments, says: “Investor response to the existing range of MyFolio funds has been extremely positive, with assets under management growing to more than £900m since its launch in October 2010. This is testament to the general strong demand from investors for risk-controlled multi-asset funds.

“It was an entirely natural progression for us to offer income-seeking investors the opportunity to invest in funds adopting a similar risk-based approach but with a strong emphasis on the level of yield.”

Along with Architas and Henderson, Octopus also became one of the most recent houses to bolster its multi-manager range, providing the management of two new funds under the Prism Capital Management umbrella.

In February, Investment Adviser revealed Cheshire-based advisory firm Prism plans to expand its £200m fund-of-funds range with the launch of the IFDS Prism Distribution fund, which aims to deliver a 4-5 per cent yield and capital growth at least in line with inflation.

The funds have exposure to a range of asset classes, sectors and regions, and hold actively as well as passively managed investments.

Octopus’s Bish Limbu and Colin Lunnon already run Prism’s three existing funds – the £89.5m Cautious Growth, the £77.1m Capital Growth and the £21.3 Advanced vehicles.

Less volatility

Anthony Morrow, director at Prism, says the diversified strategy should help deliver a yield “less vulnerable to the fluctuations and volatility of any single asset class or underlying investment”.

He adds: “With high inflation a serious concern for savers, many investors are seeking solutions that offer not only a regular income stream, but also capital growth that stays at least in line with inflation.”

With increasing numbers of products on offer to advisers and their clients, fund-to-fund comparisons will inevitably become more difficult, but one thing remains true – the multi-manager franchise cannot be ignored.

Jenny Lowe is features editor at Investment Adviser

IN THIS REPORT
  1. Don’t choose on price alone

    Price tags might be a good indicator when it comes to wine, but choosing multi-manager funds on a price basis is dangerous

  2. The ones to watch

    With roughly 300 multi-manager funds available, which have outperformed and are expected to achieve steady returns?

  3. A more nimble approach is required

    How are multi-managers navigating the markets and what strategies are they using to boost returns?

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