A multi-manager has typically been perceived, because of the way those products have been used, as a one-stop solution for a lot of investors in a wide variety of market conditions.
Adrian Lowcock, senior investment manager of Bristol-based Hargreaves Lansdown, says multi-manager is not necessarily going to be as aggressive as some of the multi-asset funds have been in chasing top returns.
Peter Fitzgerald, head of multi-asset retail funds at Aviva Investors, says if you pay more for active security selection then you should see greater returns for actively managed portfolios.
But like most things in investments, Mr Fitzgerald warns greater returns for actively managed portfolios is not guaranteed, and many advisers may prefer a cheaper solution.
Paul Rutland, investment business development manager of Prudential, says the key factor in multi-asset or multi-manager investing is that it is reasonable to expect that asset classes behave differently to each other in a variety of market conditions.
This is not always the case. For example, in the financial crisis most asset classes fell in tandem.
Mr Rutland says a further factor to consider is that most fund managers will admit it is impossible to call the best performing asset classes all of the time - they will have views and based on economic conditions, one asset class might be favoured. But world events which cannot be predicted can dramatically change things very quickly (for example, the credit crunch and the tsunami tragedy).
He says: “It should also be remembered that fixed interest assets tend to be less volatile then equities, so an appropriate portfolio for a more cautious investor would always have a higher exposure to fixed interest securities.”
The best multi-managers should be able to create portfolios designed to achieve target returns in all market conditions, while keeping risk to a minimum, Francis Ghiloni, director of distribution and client management at Scottish Widows Investment Partnership, says.
It is not just about picking the top performing fund in each sector, he insists, but about combining the right funds with complementary characteristics.
By doing so, Mr Ghiloni says it is possible to achieve desired returns in a consistent, risk-efficient manner whatever the prevailing market backdrop.
Mr Ghiloni says: “In our opinion, the current environment is one in which the importance of diversification really comes to the fore.
“With risk assets such as equities and corporate bonds generating some eye-catching returns over the last year or so, it has been easy to forget the benefits of a well-diversified portfolio.
“Meanwhile, other asset classes that were left behind during this risk rally are starting to show potential. For example, there are now signs that commercial property is starting to turn the corner.
“And with a very attractive-looking yield compared to gilts, it is an asset class worthy of consideration.”
But Jamie Farquhar, head of sales for JP Morgan Adviser Solutions, says there is no overriding reason why multi-asset would necessarily outperform multi-manager – or vice versa - in any given market cycle.