Is it a sensible idea to use 1 multi manager fund?

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Having taken advice from an independent FA, he feels that we (myself and partner) should hold all our investments in one fund. The fund is a fund of funds and would hold both our pension pots and isa's in this fund.

We are uneasy about having all our eggs in one basket. Although it is a good fund of funds and is recommended because it comprises a balanced portfolio. Can anyone say if this is a reasonable thing to do - as we are uneasy about having all our investments in only one "fund"?
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  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    I know what you mean, it's not quite the same as your situation, I have tried to slim down my portfolio but still ended up with a few very overlapping funds mostly where I couldn't make my mind up amd in theory shoudl have just one. . So far they are tracking each other very closely (as they should).

    So, if you wanted say a low cost global tracker there are probably a dozen with little to choose between them, (same for any other area) it won't do any harm to spread over 2 or 3 very similar.

    Of course, once you have all your investments in one fund of funds you don't really need an IFAa, it should manage itself at that point. What is the fund?
  • balooney2000
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    But is it a good strategy to be using that one fund for every investment?
  • slowpoke_rodriguez
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    I wouldn't.
    What is the fund?
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    Well, in theory if it's a fund of funds, it isn't one fund it's "really" (say) a dozen funds and the overall fund manager controls the allocation transparently to you.

    It's no different to having those same dozen funds managed by your IFA and them controlling the proportion of each you had.

    As someone that's been managing their own funds and shares for "ahem" years, I personally would find it very difficult to have just one fund, perhaps if you feel uneasy about having one fund you'd rather control / specify what the funds are yourself, maybe with advice from IFA ?* but i could probably replace 50% of my portfolio with one fund and I haven't done that. Is that logical? Probably not but it gives me some extra funds to watch :D

    Or is it a question of fraud or malfeasance ? I suppose the odds are marginally higher of losing everything if it's just one fund and the guy in charge is called Bernie Madoff.

    What is the fund?

    * some folks here will say "ahah" do you reckon you can do better than professional fund managers by controlling the allocation and the answer to that is "quite possibly". There is no absolute objective measure of what they should be and what will do best ivervthe long term. And you might take a punt (word used advisedjt) that over the long term, let's say health care will do better than average so you'll bump up the allocation of that in your portfolio slightly by having a healthcare fund.
  • ColdIron
    ColdIron Posts: 9,163 Forumite
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    I wouldn't be worried about a single fund if I was happy with its make-up and charges. If you stop and think about it most people that save into a private pension fund via their employer or a personal pension are invested in a single balanced fund. I agree with AJ that you wouldn't need an advisor

    It would help if you said what the fund was
  • dunstonh
    dunstonh Posts: 116,669 Forumite
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    Having taken advice from an independent FA, he feels that we (myself and partner) should hold all our investments in one fund.

    Quite normal for small investors. No point having more until you build up more money. You don't say the amount. It would help.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • balooney2000
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    We have just over £400k split between 2 pensions and 2 Isa's all invested in Henderson Cautious managed.
  • Marine_life
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    We have just over £400k split between 2 pensions and 2 Isa's all invested in Henderson Cautious managed.

    I am not an expert but for me with around 70+% UK exposure it feels a little unbalanced.
    Money won't buy you happiness....but I have never been in a situation where more money made things worse!
  • dunstonh
    dunstonh Posts: 116,669 Forumite
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    We have just over £400k split between 2 pensions and 2 Isa's all invested in Henderson Cautious managed.

    In which case no. With £400k, you would expect either a bespoke portfolio of funds (10 or so funds with one fund in each investment area) or a selection of multi-asset funds. Not just one.

    £40k would be fine in one fund. Even 80k. Not £400k. Some could argue that some multi-asset funds could be ok as a single fund but personally, I would not.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    I am not an expert but for me with around 70+% UK exposure it feels a little unbalanced.

    Hugely unbalanced I'd say, because it has 50% UK shares, and that is effectively all the shares it has, everything else is trivial percentages. There must surely be similar 'cautious' funds with a much more global outlook which almost by definition are more cautious / less risky / more balanced.

    There are some funds I could, sort of, imagine having all my investments in. Not this one in a month of Sundays.
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