Schroder S&P High Alpha Portfolio
Unit trust multi-manager fund of funds
Growth by investing in a portfolio of 12-15 funds
Lump sum £1,000
47.3% UK equities, 14.8% Europe ex UK, 9.3% Japan, 9% alternatives, 7.8% Asia ex Japan, 5.8% emerging markets, 5.2% Us, 1% cash
Tel: 0800 718777
The Schroder S&P high alpha fund is an aggressively managed fund which can invest up to 10 per cent in alternative investments such as hedge funds, private equity and property.
Putting the fund into its market context French & Associates managing director Keith French says: “No single fund house can be the best in every sector. Multi-manager funds of funds provide investors with professionally managed portfolios through which they can access the most talented managers in the market.”
French feels funds of funds are useful because staying on top of the portfolio, picking funds and monitoring their progress is a time consuming and expensive business. “Avoiding fads and crucially, managing investment style through the investment cycle, requires up to date investment data and cutting edge risk analysis tools,” he says.
French believes Schroders is a global leader in multi-manager funds of funds portfolios. He points out it already manage in excess of US$ 750 million in multi-manager funds, running a wide variety of mandates for clients worldwide.
He says: “Its success has been built on the strength of their research capability, bolstered by access to Standard & Poor's global research resources and through the use of PRISM - Portfolio Risk Investment Strategy Manager. This is a proprietary portfolio monitoring system which enables Schroders to combine different strategies and styles within the portfolios and thus manage risk through the investment cycle.”
According to French Schroders' unique relationship with the number one name in investment research, Standard & Poor's, should give advisers confidence that Schroders' portfolio management skills are backed up by S&P's in depth fund analysis. He says: “This is a strong investment concept to put to clients and reduces the amount of time spent by the adviser in monitoring a portfolio.”
On the downside French says: “Although the literature provides easy reading, the concept of multi-manager funds will still be bewildering to the lay person and therefore further explanation will be required.” French also complains that there is no monthly savings option, which he thinks would lead to wider use of the product even if the minimum investment was higher. He sees competition coming from companies offering a range of risk graded funds such as those offered by Gartmore Portfolio.
Summing up French says: “The popularity of multi-manager funds is increasing, with recent figures indicating around £2bn a year going into these products. Competition will increase as more players come into the market. Initially this should be good for the investor, but no doubt in time the market will be dominated by the larger players, with the smaller players being swallowed up and therefore reducing investor choice.”
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Good