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Popularity of multi-manager funds soars

Multi-manager funds have soared in popularity over the past 18 months, with sales more than trebling between 1999 and 2000, according to research from Cerulli Associates.

The figures show UK retail fund of fund sales have risen by almost 290 per cent between 1999 and 2000 to £331m from £85m.

The biggest growth has been in the active managed sector, which saw fund of funds sales grow by more than 12 times in 2000.

Sales also look set to reach new heights again this year, with £212m already sold in the first five months.

The surge in popularity has been met with a barrage of new entrants into the multi-manager market this year.

Jupiter and Credit Suisse Asset Management both launched new funds of funds services this summer while Solus is set to start a multi-manager service in the autumn.

Credit Suisse Asset Management director Robert Burdett believes the industry&#39s growth is down to two main reasons.

He says: “People like Fidelity and Royal & Sun Alliance have aggressively been promoting their in-house fund of funds – which have performed very well.

“On the independent side, there has been a succession of regulatory changes that have caused an increasing amount of financial advisers to give up selecting funds themselves. Companies such as Rothschild and now Credit Suisse have moved in to fill that gap.”

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