The Close Finsbury multiasset portfolio is an Oeic fund of funds that aims for growth by investing in a range of asset classes including equities, bonds, property and hedge funds.
In keeping with Close Finsbury's policy of outsourcing, the fund will be managed by Berry Asset Management. Berry was chosen because it has managed multi-asset portfolios since it was formed in 1981. The company will select and monitor the underlying investments, using a combination of its own research and other sources such as research provided by Swiss private bank Bordier & Cie.
The first stage in selecting the underlying investments is asset allocation strategy, which is based on economic growth, interest rates and inflation expectations. The most appropriate investments are then chosen, initially using a screening process to identify the best performers. This is followed by meetings with fund managers to discuss the investment process, portfolio construction and turnover of stocks within the underlying funds. Other factors such as the fund managers' experience, charges and entry costs will also be considered.
The next stage is creating a master list of buys and potential buys. Funds are categorised according to asset class, style and risk. Once selected for the portfolio, funds are reviewed and may be replaced if they have underperformed for more than three months or there is a significant change such as a fund manager leaving.
Although other funds of funds can invest in a range of asset classes many do not make full use of this potential. For example, the Schroder S&P high alpha fund can invest up to 10 per cent in alternative investments but will initially prefer hedge funds and private equity to commercial property.
However, one drawback of Close Finsbury's fund is that it is ineligible for Isas due to its minimum investment of £25,000.