The fund has attracted net inflows of over £10m a month on the back of its top quartile performance during volatile market conditions.
The company says advisers are looking for cost-effective solutions to the problem of each asset class being unable to perform well at all times in all market conditions.
Head of UK advisory sales Robert Thorpe says: “We have one of the most competitively priced cautious managed funds of funds in the industry. Our diversity fund ticks a lot of boxes for advisers and epitomises the ideal core holding.
“The fund is rapidly becoming the multi-asset, multi-manager fund of choice among advisers. Despite a period of continued volatility in the markets, the fund has delivered top quartile performance. “
According to Lipper, Cazenove multi-manager diversity is ranked 37th out of 136 funds over one year and sixth out of 84 funds over three years with net income reinvested as at July 31, 2009.
Fund managers Marcus Brookes and Robin McDonald have recently increased exposure to corporate bonds and to some high-yielding sectors.
McDonald says: “We continue to see good opportunities across asset classes, yet maintain a broadly defensive skew in light of what we believe remains a tough economic backdrop. Our favoured areas of the equity market remain in sectors that offer attractive valuations and limited economic sensitivity.”