Multi-manager funds?

Coeus

Hi all!

Was wondering whether anyone utilises their S&S ISA with a multi-manager fund for example a Hargreaves Lansdown multi-manager fund (http://www.h-l.co.uk/funds/multi-manager-funds).

Currently holding an S&S ISA with Halifax but believe performance wise it can do better.

A multi-manager fund seems to suit as I do not have the time to research individual funds thus a monthly payment to be invested into multiple funds seems to suit.

Thanks for any feedback!

Coeus.

dunstonh

I am not a fan of multi-manager funds. The concept is for lazy investors. However, I would prefer fund of funds instead. HL's own brand MM funds are not great either. Unfortunately, on this board we have seen people move out of cheaper and better funds into these with the mistaken belief that they are better. HL make a killing on these funds. They get the fund house cut, the platform cut and the IFA cut and they dont have to pay any rebates to the platform as its their own platform. On that basis, their MM funds should be much cheaper than they actually are.

If you plan on being a lazy investor then you are looking in the right direction of a self balancing diverse portfolio fund. However, look a bit harder. Also, remember that you are paying for it if you use that. For example, the HL MM balanced fund has a total expense ratio of 1.83%. That is more than you would get on a portfolio set up by an IFA getting paid to service it. A FoF or MM fund is going to be more expensive. That is expected. However, don't jump in with the own brand funds. Look deeper.

mike88

These funds are ideal for novice investors. Their annual costs tend to be expensive but are a good entry level investment and for those who are not interested or disinclined to play the market. The Jupiter Merlin range has a good track record and one of the best and cheaper to run managed fund is that run by M&G (M&G Managed Growth which invests internationally)) overseen by Graham French who has been at it successfully for a long time.

Coeus

I have come to the conclusion that a MM fund is appropriate in my situation (thanks especially dunstonh) until time (and experience) allows me to pick my own funds with confidence.

So the next step is... which would you suggest? I have had a look at all the HL MM funds (special situations seems tempting) and a very brief look at Jupiter Merlin - though I have not compared and contrasted the two for performance & costs.

Mike88 would you recommend any I focus in the Jupiter Merlin range? Will pour through all of them later tonight but some direction would be good (reasons why especially)!

Feesarefare forgive the ignorance but what is a MOM Fund? Does is have significant benefits on MM funds?

I'm learning so much it is brill! Thank you all

mike88

Coeus wrote: »

Mike88 would you recommend any I focus in the Jupiter Merlin range? Will pour through all of them later tonight but some direction would be good (reasons why especially)!

This is by no means a recommendation as fund choices are a matter of personal preference. For example what is your risk profile, age and investment objectives? You seem to like Jupiter Merlin.

Thus as a starter investment my personal choice would be to opt for a general international fund such as Jupiter Merlin Growth which has a good management team and good performance. But the decision is yours and yours alone. There is a useful link to this fund here:

http://citywire.co.uk/fund/jupiter-merlin-growth-portfolio-acc/c8589?classSchemeID=1&timePeriod=36&section=money#assetalloc

You will see the fund manager has a very wide remit. In bad times there is flexibility to move into Bonds in order to protect downside risk and the manager is also able to - and does- invest globally. Some funds have a more restrictive remit which sometimes means that in a depressed economy when shares are in freefall the manager has nowhere to go.

Use this City Wire site to investigate all your options. The League tables are particularly useful.

Whatever you decide, don't forget to invest through a discount broker such as Hargreaves Lansdown as they will rebate upfront buying fees and discount trail commissions. The saving is rougly 5% of the upfront charges so is worthwhile.

Remember that the choice is yours and you must make your own decisions and be responsible for them.

Finally are you prepared for funds to lose money because that often happens. Investment is for the long term and investors old and new must be prepared to ride the peaks and troughs.

browniej

feesarefare wrote: »

I persoanlly favour Multi-Manager Portfolios which go one stage further than MOM Funds and have even lower costs

What are Multi-Manager Portfolios and how do you access them?

and when held outwith an ISA are more tax efficent.

Do you mean they are more efficient if you hold them outside of an ISA or do you mean if they had to be outside of an ISA they are more tax efficient than other funds?

browniej

feesarefare wrote: »

This article sums up the pro's and con's quite well

http://www.ftadviser.com/InvestmentAdviser/Investments/Products/MultiManager/Supplements/article/20090504/3459e752-301e-11de-b6eb-00144f2af8e8/MultiManager-Fund-of-funds-versus-manager-of-managers.jsp

This article proved interesting too.

http://www.moneywise.co.uk/investing/funds/article/2011/02/09/are-multi-manager-funds-worth-the-cost

Rollinghome

You might also want to consider multi-manager Investment Trusts which tend to have much lower costs as they pay no commission to advisers; such as Witan which has a TER of 0.71%. Factsheet: http://www.witanwisdom.com/how-to-invest/sites/default/files/literature/fact-sheet_sep09.pdf

Loughton_Monkey

Another approach would be simply to 'look inside' these MM funds and put together your own funds directly in a similar proportion. All depends how 'active' you are going to be.

It is very easy to 'over-analyse' these things. Spend a whole week if you want, analysing past performance of hundreds of funds. Star ratings. Pundit columns. Economic Outlooks..... No problem. But tomorrow morning, you will wake up (and so will all your fund managers) and face the next 6 months sure in the knowledge that it will be nothing like the last 6 months.

So spread your money around a sensible mixture of fund types, geographies and focuses, and move on.

sabretoothtigger

In that spirit, just buy everything warren buffet buys. I believe you'd have beaten the market every year playing copycat. All major fund and fund managers including secret hedge funds must declare 5% or greater company holdings

browniej

feesarefare wrote: »

Some relevant points but I dont see where multi-manager portfolios have been mentioned.

No you are correct - I don't think they do, or at least not in those exact words.

My problem was that in the article you linked to I didn't see that exact phrase either and I'm still puzzled as to what exactly a multi-manager portfolio is and how it differs from multi-manager funds or fund of funds.

I also find it interesting that there is no comparison made with regard to the performance and costs of IFA's managing their client's investments. Most of those are just multi-manager portfolios that are run by amateurs.

I think you're saying that an IFA who selects a range of funds from different providers ( therefore different managers ) is creating a multi-manager portfolio. Is that correct? You are also saying that the IFA is an amateur - correct?

Presumably therefore the average amc is 1.5% ( or perhaps I should use the average ter of 1.65% for a true comparison)?

How would the multi-manager portfolio that you speak about compare with charges? I'm assuming it would be dearer if run by an expert? I know you said earlier not to get too bogged down by charges and to a certain extent I agree. However it still has to be a consideration.

How does the average investor invest in a multi-manager portfolio such as this?