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Octopus tailors portfolio service

Octopus Investments has established a discretionary portfolio management service run by the company’s multi-manager team.

Portfolio manager will provide flexible, tailored portfolios for investments of any size. Octopus says this type of service has traditionally been the preserve of the very wealthy. It wants to provide a more affordable option using its multi-manager process as a foundation.

Portfolio manager is built around five asset-specific multi-manager funds that invest in a mix of active and passively managed funds, in keeping with the Octopus multi-manager team’s strategy of managing costs.

The multi-manager funds are combined in different weightings to create 10 risk-graded investment portfolios that can be used alongside the risk profiling questionnaires used by advisers.

Portfolio manager provides diversification, so there is not too much in any one market of sector, which should reduce the impact of any single fund underperforming. By using different proportions of multi-manager funds to create risk-graded investment portfolios, Octopus is bridging the gap between funds of funds and the type of discretionary fund management.

In the latest issue of Blending Talents, Defaqto’s multi-manager report,  author Fraser Donaldson says discretionary fund managers have the retail market in their sights in the light of the Retail Distribution Review, so this product could be well timed.

However, Octopus could face competition from multi-managers who run risk-graded funds, such as LV= Asset Management and F&C, and other portfolio management providers including London & Capital.

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