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Cash in funds of funds at a record £83bn

Multi-asset and multi-manager portfolios in the Investment Management Association’s Mixed Investment 20-60 per cent shares sector are continuing to enjoy their day in the sun, as the amount held in funds of funds hit a record £83bn.

According to the latest data from the fund management trade body, Mixed Investment 20-60 per cent Shares notched up a total of £273m in net retail sales during August, £43m more than the UK Equity Income sector, the month’s runner up.

As a result, the sector has now been the investor favourite for three months straight. But while the category is often viewed as something of a mixed bag, inhabited by managed, multi-manager and distribution funds, the amount of investors’ cash in funds of funds overall now at stands at a record £83bn.

At this level, funds of funds now account for 11.3 per cent of total industry portfolios under management, despite sales over the month falling short of recent months.

Informed Choice managing director Martin Bamford, says: “I have been surprised by the popularity of multi-manager funds over recent months. I am not a fan as they do not give investors control over asset allocation.

“The surge in demand could be symptomatic of the impact of the RDR where more investors are looking for one-stop shop solutions. But also it may be advisers, unsure of what to recommend clients, buying them.”

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