Despite the Investment Management Association (IMA) figures showing yet another record high for funds under management by multi-managers, there are only a handful with a demonstrable track record says Defaqto, an independent financial research company specialising in rating, comparing and analysing financial products.
Despite market uncertainty and tough trading conditions, the IMA shows around £42 billion of multi-manager assets under management by its members at the end of 2009. This is an increase of some 42 per cent from the end of 2008, and over 260 per cent for the decade.
Despite this growth, and the number funds available continuing to increase, there are only a handful of multi-managers Defaqto ranks highly that have been around for the whole decade.
In fact, Defacto says only around 5 per cent of multi-manager funds in the UK market have been around for 10 years, have a named fund manager and therefore a demonstrable track record.
Guide author and Insight Analyst at Defaqto, Fraser Donaldson says that multi-manager investing continues to be the investment outsourcing method of choice.
“The Retail Distribution Review (RDR) is forcing advisers to look at their businesses, and more and more of them are concluding that outsourcing some or all of their investment processes is a sensible business decision," said Donaldson.
"As implementation of the RDR gets ever nearer, we can only see this trend increasing,” he added.
“There will be more funds being launched, closed or merged. There is a diversity of techniques employed by the managers, from multi-manager passive investing through to employing full use of multi-asset investing, and everything in between."
Defaqto has issued a free guide that looks at the multi-manger industry over the last 10 years of growth, identifying which managers have stood the test of time and detailing fund information.
Although aimed primarily at IFAs, the guide aims to help the research process covering over 250 multi-manager funds and associated performance ratios, asset allocation details and fund style indicators.
The guide can be downloaded at
www.defaqto.com
