The fund is managed by Jeff King of Scottish Widows Investment Partnership, with multi-manager specialist Russell Investment Management acting as investment adviser. Russells role involves ongoing research and evaluation of retail and institutional managers around the world, including boutique managers.
Alliance Capital, MFS and Brandywine have initially been selected and each will manage a third of the portfolio. Alliance Capital was chosen for its research capabilities, MFS was chosen for its growth at a reasonable price philosophy and Brandywine was selected for its value approach to stock selection.
The three management groups will work to an investment brief set can invest in equities anywhere in the world except the UK as this region is adequately covered by the other three new funds. The fund will be benchmarked against the FTSE World ex UK index and can hold up to 10 per cent in emerging markets.
The new funds were designed for IFAs who want to make their own asset allocation decisions and create their own portfolios. Scottish Widows already has four multi-manager funds in the investment solutions range, but unlike the new funds, they are ready-made risk-graded portfolios with exposure to both equities and bonds.
IFAs may like the idea of outsourcing investment decisions to specialist multi-managers but may be concerned that they will lose a degree of control over their clients portfolios. Having a series of multi-manager funds investing in different asset classes and regions may hand some of the decision-making back to the IFA while still making use of the investment specialists skills.
However, the new funds focus only on equities, so IFAs who want to add a bond element to a clients Scottish Widows investment portfolio must use a single manager fund.