Multi-manager  

Platform-based funds of funds flourish in post-RDR world

Fund of funds ranges from Standard Life and Axa have emerged as the dominant players in the wake of the RDR as their broad ranges and platform distribution have outgunned other contenders.

Standard Life Investments’ MyFolio range, run by Bambos Hambi, saw inflows of roughly £460m in the six months to the end of August, according to FE Analytics estimates, and £750m in 12 months.

Axa’s Architas Multi-Asset range has brought in approximately £180m in six months, the calculations show, putting it in second place.

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The groups are outselling leading multi-manager ranges from Jupiter, Cazenove and F&C that once dominated the sales leagues.

Both offerings were launched in the build-up to the RDR with a range of risk-rated portfolios and a choice between funds of active and passive funds, aimed at advisers wanting to outsource investment duties.

They are promoted by their parent companies’ fund platforms, giving them a major advantage. In some cases, integrated financial planning tools on the platforms provide direct sales links to the funds.

Old Mutual Global Investors’ Spectrum range of risk-rated funds of funds has also recorded strong sales, in part due its direct link to the Skandia platform and its risk-profiling tools.

Morningstar historic estimates of inflows into multi-manager products in each of the past three years to the end of July show Architas growing its inflows year after year, while other dominant multi-managers have seen the amount of investor cash drop off.

Architas managing director Hans Georgeson said access to the Axa Elevate platform was part of the range’s recent success, but he also cited an expansion in distribution outside of Elevate to other platforms since the beginning of 2013. “The business is beginning to build credibility and a profile in the industry, which two or three years ago would not have been possible,” Mr Georgeson said.

A spokesperson for Standard Life Investments did not comment on the data from FE Analytics and Morningstar, but referred to inflows of £750m into the MyFolio range in the first half of 2013 reported in parent company Standard Life’s half-year results.

At the other end of the scale, Morningstar’s data shows Henderson’s multi-manager range recorded an outflow of approximately £400m in the 12 months to the end of July 2013. A spokesperson for Henderson said much of this outflow was down to a large client’s withdrawal from the Henderson Multi-Manager Income & Growth fund in August 2012.

Henderson’s Cirilium range – launched in 2008 with national adviser network Intrinsic Financial Services – has been far more successful, bringing in more than £500m in the three years covered by Morningstar’s data.

The flows data also indicates that efforts made by some providers to cut prices have not had a significant impact on inflows. Both Aberdeen and F&C reduced their charges in September 2012, but have yet to see significant new business.

F&C co-head of multi-manager Gary Potter said his funds were starting to see positive inflows. “We’ve got the performance now to build on and re-covery is in place with no drastic changes to our investment policy,” he said.