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Guide to multi-manager

Published by FTAdviser | Jun 06, 2012

Multi-manager aims to add an extra layer of diversification either through holding funds that have already gone through a process of diversification themselves, or by segmenting a portfolio and outsourcing its management to individuals who have expertise in a particular area.

But as multi-manager propositions cost more than single funds yet some have failed to deliver better returns, should advisers be recommending these deals?

This guide tackles the different types of multi-manager propositions, how managers drill down the fund universe to make their selection and how to make sure you pick the best deal for your client.

Answers supplied by Caspar Rock, chief investment officer of Architas, Gary Collins, head of UK retail sales at Threadneedle, and Tom Caddick, head of fund management for global multi-manager at Santander Asset Management UK.

IN THIS GUIDE
  1. Q: What is multi-manager?

    Multi-manager is a style of portfolio through which an investor can invest in a variety of underlying funds selected and packaged by a provider.

  2. Q: How does multi-manager differ from fund of funds?

    A multi-manager builds investment solutions where the underlying investment management is delegated in some way to a third party asset manager.

  3. Q: How are funds selected?

    Multi-managers can use a quantitative or qualitative analysis and may interview those running individual funds in order to make their selection.

  4. Q: What are the pros and cons of fund selecting?

    Different methods of researching funds focus on different aspects of the way a manager seeks to deliver returns for investors.

  5. Q: What investor should consider multi-manager funds?

    Multi-manager funds are a simple route to achieving diversification across a spread of markets and investment styles in a cost-effective manner.

  6. Q: What part should multi-manager play in a portfolio?

    Multi-manager funds can be used as stand-alone investment solutions.

  7. Q: What are the charges like?

    Underlying charges and costs will typically be made up of three distinct elements.

  8. Q: How can I research multi-manager funds?

    Key considerations to make when researching and selecting multi-manager products include:

  9. Q: How can I make sure the fund suits my client?

    Multi-manager funds, as managed solutions, would normally sit in the IMA Managed sectors.

  10. Q: Who must make sure the multi-manager remains suitable?

    It is the IFA’s responsibility to make sure that the multi-manager remains suitable for their client.

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