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Gartmore multi-manager charges into action

Gartmore has introduced four multi-manager funds to complement the existing Gartmore Portfolio: balanced strategy fund.

One of the new funds, the Gartmore Portfolio: UK high alpha fund aims for growth by investing in funds that invest mainly in UK equities. It will be managed by Gartmore head of multi-manager Bambos Hambi and fund manager Marcus Brookes, with asset allocation provided by Gartmore Portfolio&#39s head of asset allocation, Peter Gale, who also heads the private equity team.

A core and satellite approach means relatively lower-risk core UK funds will be complemented by a smaller number of higher-risk satellite funds. The first step is researching the fund universe to identify which funds are most likely to perform well in the future. The team then decides on the best combination of funds to meet the multi-manager fund&#39s risk profile and objectives, ensuring diversity of region and asset class. This will involve the assessment of factors such as the strengths and weaknesses of both the fund and the investment team behind it.

Gartmore will not invest in its own funds to ensure there are no conflicts of interest and says it can negotiate discounted annual management charges on the underlying funds, some of which are not available directly to retail investors.

A performance-related fee structure will take effect after the first 12 months so the annual management charge will increase or reduce to between 1 per cent and 1.75 per cent depending on performance.

Some IFAs like multi-manager funds because investment decisions are delegated to specialists who can constantly monitor the portfolio, but this inevitably involves another level of charges which put some investors off. A performance-related fee structure recognises that the charges must be justified by the results and may be more appealing then funds which charge a flat fee.


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