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Sarasin takes concentrated approach to funds of funds

Sarasin & Partners has launched two Oeic funds of funds that will each have fairly concentrated portfolios of 15 to 25 funds.

As their names suggest, the Sarasin global equity fund of funds will invest mainly in equities while the Sarasin global diversified fund of funds will invest in a range of asset classes such as equities, bonds and alternatives. Both funds aims for growth by investing mainly in unit trusts, Oeics, exchange traded funds, investment trusts and other investment funds and will be managed by Sarasin partner Sam Jeffries and co-manager Oliver Tucker. The managers will be supported by team members Lucy Empson and David Vickers.

The team will construct each fund of funds portfolio using a bottom-up screening process that generates ideas through Sarasin’s wider asset allocation process. This looks for long-term trends and investment themes from a macro-economic perspective, with the intention of being forward looking rather than investing on the basis of what has already happened.

The investment team is looking for adaptable, robust and repeatable processes from the underlying managers so that they invest with people who generate returns though skill rather than luck. The team will buy active funds only where the managers are expressing a view, otherwise they will go for a passive fund, and they also prefer managers who have the experience of running portfolios in different market cycles.

Many advisers may be looking at outsourcing the management of their clients’ investment portfolios ahead of the RDR and may already feel overwhelmed by the choice of various funds of funds and discretionary portfolios.

Sarasin believes the benefits of its funds of funds include diversification, the ability to identify the best performers and providing a mix of active and passive holdings to provide flexibility and control costs. These strengths may apply to many of the fund of funds already available to IFAs and their clients. However, Sarasin is well known for its thematic approach to investment and this could set the new funds apart from the competition.

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