The Cazenove multi-manager diversity balanced fund aims for growth and income by investing in a multi-asset portfolio of investment funds. It will invest 50 to 85 per cent in equities, up to 50 per cent in fixed-interest and cash, with up to 50 per cent alternative asset classes.
The fund sits in theIMA Mixed Investment 40-85% Shares sector, formerly the Balanced Managed sector, andaims to outperform its composite benchmark of 50 per cent FTSE All-Share, 15 per cent FTSE World (ex UK), 10 per cent FTSE UK GovtAll Stocks, 10 per cent Investment Property Databank, 10 per cent Hedge Fund Research Inc. and 5 per cent Goldman Sachs Commodity index.
The fund is managed by Head of Multi-Manager Marcus Brooks and co-manager Robin McDonald. Brookesjoined Cazenove in January 2008 fromGartmore, where he ran multi-manager funds with Bambos Hambi, who is now head of funds of funds at Standard Life Investments. Brookes has 18 years’ investment experience and has also worked for Insight Investment. McDonald joinedCazenove in October 2007, having previously been an analyst at Gartmore and Insight Investment.
Deciding on the right asset mix for the fund is based on an analysis of three areas – historical returns, volatility and correlation. Brooks and McDonald will look at the long-term historical returns from each asset class and the expected average return in the future. They also assess the volatility of asset classes and the correlation of performance and volatility between asset classes. Once the asset allocation is determined, the most suitable funds are chosen form which to build the final portfolio.
The managers’ long-term track record in running multi-asset funds of funds should ensure plenty of interest from investors. However, there are many multi-asset funds of funds in the same sector that could provide competition, including MAM Funds, Premier and Jupiter.