What is multi-manager investment?
An investment product consisting of multiple funds managed by different specialists. This enables even small-scale investors to achieve a diversified portfolio.
Where have you heard about multi-manager investment?
Multi-manager funds are often marketed as a ‘one-stop-shop’, particularly for investors with small amounts of money who prefer to outsource some of their decision-making.
What you need to know about multi-manager investment.
The theory behind multi-manager investment is that individual investment managers are not specialists in all markets and will not be successful all the time. By investing in multiple funds or managers, multi-manager investments provide an opportunity to achieve diversity through purchasing a single product.
There are two types of multi-manager investment funds:
- A fund of funds portfolio invests in a range of different investment funds
- A manager of managers fund uses a number of investment managers who are specialists in different asset classes
Although multi-manager investment funds can help diversify small investment portfolios, the management fees are often higher than a fund managed by a single person.