Product review: Sarasin fund of funds
This month sees two more launches into the multi-manager space, with Sarasin’s Global Equity and Diversified funds of funds.
Managed by a team of four, each OEIC will hold 15 to 25 funds, focusing on long-term capital growth, and will sit in the IMA Specialist sector. The underlying funds will be selected from a wide universe, using a bottom-up screening process. However, the fund managers will use the company’s wider predictions for long-term trends and investment themes to guide their selections.
The funds will differ in their risk profile. The Global Equity fund will be benchmarked to half in the MSCI All Countries World Index and the other half in the sterling hedged version.
Meanwhile the Diversified fund will be benchmarked to 50% in these equities, 40% in ML Sterling Broad Market Bond Index and 10% to the three month LIBOR rate.
Both funds will have a 1.5% AMC, 5% initial, no performance fee and £1,000 minimum investment.
These launches come as no surprise, timed ahead of RDR as many predict the use of one-stop-shop solutions, such as multi-asset funds, multi-manager funds and discretionary fund managers, to boom.
Using a fund of funds approach was shown in the latest Money Management survey on multi-manager funds to be more successful than manager of manager, getting this off to a good start.
The fund will only use passives in a small way, focusing on active management, meaning the dealing costs may be higher than competitors. The benchmarking structure is complex, meaning working out exactly what the Diversified fund is targeting is no easy task.
This is the first fund of fund launch for Sarasin, and it has a relatively short track record, but if costs are kept down it could prove a good buy.