View more on these topics

MGI won’t overload mandates

Mercer Global Investors says manager of managers is a such a scaleable strategy that it will never take between more than two to five managers to run a portfolio.

The company has recently unveiled plans to enter the UK retail market through a limited number of strategic partnerships with insurance companies.

However, it is not expecting to increase the number of managers on its mandates as they grow in size, claiming that this risks diluting returns.

MGI believes the right number of managers is dependent on the type of mandate and on market conditions, with a greater number of managers needed in volatile environments to diversify risk.

The company points out that some managers will underperform at times when market conditions do not suit their investment strategies but adds that it is important to understand the reasons behind the underperformance.

The company says the transparency of the manager of managers proposition makes it easier to understand the characteristics that lead to performance, so underperformance can be spotted at the early stages rather than waiting until investors feel the full impact.

Principal and head of business development, Europe, Amit Popat says: “Capacity is a big issue but as the funds increase in size, having more managers is not the answer. We think if there are too many managers, they will revert to the mean.”

Recommended

Incentives could make IFAs change models

Most IFAs say they would con-sider changing their business model if the FSA offered financial or other incentives to become a professional financial planner, according to Aegon’s latest IFA Insights survey.Sixty-one per cent of adv-isers said they would consider gaining higher qualifications and introducing customer agreed remuner-ation to fit the FSA’s proposed “professional model” if […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com