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Defaqto says diversify across multi-managers

Diversification across more than one multi-manager is important for investors given the increasing use of exchange traded funds and cash in multi-manager funds, according to Defaqto.

In the latest issue of the multi-manager guide, Blending Talents, principal consultant (investments) Fraser Donaldson says uncertain market conditions are prompting more managers to invest in cash as an asset class and keep costs down through ETFs, but do so to varying degrees.

Donaldson says neither trend is a bad thing and that holding cash may be a temporary measure while markets are uncertain, but investors need to be aware of how their manager is investing.

Big cash weightings may have implications for advisers who make asset allocation decisions for clients and multi-manager who are not fully invested risk missing the boat in rising markets.

Similarly, Donaldson says ETFs are not a bad thing but some investors are fans of active management and buy multi-manager funds on that basis.

Donaldson says: “Multi-manager is a collection of fund managers who buy other fund managers and relying on more than one can diversify the risk of those funds. It would not hurt to choose two.”


Internal affairs

I am writing to you in order to ascertain whether or not any fellow IFAs out there believe that my attitude to the following problem is misplaced or misguided. We recently dealt with a case on behalf of a client who had a “six-figure” pension fund with Prudential. This was a fund that we had […]

Banks double the adviser figure for upheld FOS complaints

The Financial Ombudsman Service upheld 69 per cent of bank complaints in the last year, more than double the 33 per cent upheld against advisers.Figures obtained from the FOS by Money Marketing show that the uphold rate for life insurance/investment product providers was 36 per cent in 2008/09. The figure was 45 per cent for both […]

Weak point

I have only ever had one complaint and it was not upheld. I told him not to dump equities to buy bonds, he thought otherwise Bonds tanked and markets shot up. Oddly enough, he blamed me for his loss. With pension and endowment mis-selling, advisers have become a soft touch for a spot of compo.


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