Several multi-manager funds also featured in the top-10 most sold funds in the period, including Aberdeen’s £373m Multi-Manager Cautious Managed fund, the £1.4bn Schroder MM Diversity fund, and Jupiter’s £4.7bn Merlin Income Portfolio.

Generally speaking the manager of a multi-manager fund will seek other investment managers, either internally or externally, and offer them the mandate to make decisions about where to invest. So through investing in a single multi-manager fund, essentially investors are placing their money with a range of managers, each of whom will have experience in their asset class and will be hoping to deliver above average returns. These types of funds can certainly be part of an investor’s wider portfolio.

Ian Aylward, head of multi-manager research at Aviva Investors, says the ongoing appeal of multi-manager funds lies in their ability to asset allocate.

“The ability to pick the finest managers globally and then asset allocate between them adds several layers of potential sources of returns and outperformance,” he explains.

The tax efficiency of multi-manager products may also have some appeal to investors and is worth bearing in mind ahead of making any investment decision. “Obviously, trading the funds within a fund-of-funds wrapper does not incur tax either, so it’s a tax-efficient wrapper in that sense. Those elements are very attractive for multi-manager products,” he observes.

Mr Aylward points to the increasing regulatory pressure on advisers to understand their clients, and the funds and products they invest client monies in. He claims that multi-manager funds meet those growing regulatory needs.

He adds: “The vast majority of advisers will struggle to get access and meet and form a view on external managers to hold them. By outsourcing to a fund of funds then, they know we have access to the managers, form a view on them, and have experience in this space to offer a multi-manager solution for their clients that meets the regulatory needs.”

There is also a differentiation to be made between multi-manager and multi-asset funds, which investors should be aware of.

Mr Aylward points out that the main difference is that the underlying investments in multi-asset funds are direct, whether that’s in fixed income, equities or derivatives. In contrast, in multi-manager portfolios the underlying ‘building blocks’ are typically other funds or Ucits.

He adds: “You are always accessing the best specialist by asset class wherever they are in the world. Sometimes that may be in the same firm as the multi-manager; sometimes that will be externally.

“The balance depends on the multi-manager’s philosophy and indeed the quality of the managers they have in-house.”

Investors may want to take into consideration the costs associated with a multi-manager fund, as this type of investing approach can come at a price. Weighing up the costs against the tax-efficient nature of these funds may be one way for an investor to decide whether a multi-manager strategy should form part of their investment portfolio.