The trend for multi-managers to increasingly use exchange traded funds and hold cash was highlighted in the latest issue of Defaqto’s Blending Talents publication. Swip’s view is that it will hold cash and passive investments such as ETFs if there is a good reason for doing so.
Swip head of multi-manager distribution Bernard Henshall says cash was far more attractive in 2008, as it provided a decent yield and security of capital. He says Swip’s multi-manager team still hold cash but is now reducing exposure in its portfolios as other assets can generate better returns within the companies risk and return profile.
Henshall says: “We will hold passive funds, including ETFs, where we think they can do a job more efficiently than an actively managed fund. One example is in fixed interest, as active management is crowded out by the fees. We think we can offer value for money by holding some passive funds.”
Henshall says Swip has dual strength in support for its funds as they are distributed through platforms and Scottish Widows. Its multi-manager diversity and multi-manager select boutiques funds were recently made available through Scottish Widows’ life and pension wrappers and Henshall says the companies have a good relationship. He adds that the Scottish Widows extranet will become increasingly important for the distribution of Swip’s multi-manager funds to advisers