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Top 5 global multi-manager funds

Looking for multi-manager funds is tough so we've launched a series identifying the best ones in different sectors.

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by Gavin Lumsden on Jul 12, 2013 at 16:20

Top 5 global multi-manager funds

It's ironic that searching for multi-manager funds can be like looking for needles in the proverbial haystack.

Multi-manager funds invest in other funds, which is why many of them are also known as 'fund of funds'. As I explain in the video below, they are often pitched as a 'one stop shop' for investors who haven't got the time or are too confused to sift through the thousands of funds in the UK.

So it is a shame there are so many multi-manager funds to choose from!

There are hundreds of the things and the situation is made harder by the fact they are not given their own sectors. Sectors are important because they allow investors to analyse the performance of funds investing in similar areas with similar aims. In other words, you can compare apples with apples, pears with pears.

Multi-manager funds nestle alongside conventional funds in a variety of different sectors depending on whether they invest mainly in shares (equities) or in a mix of different asset classes, across the world or in different countries and regions.

Multi-manager funds rarely sit at the top of these sectors. This is partly because they have higher charges which can slow down the rate at which money invested in them grows. It also reflects the wide range of investments they hold. A multi-manager fund investing in 10 relatively focused funds could have underlying holdings in several hundred stocks and shares. Inevitably, this diversification means their returns should not hit the highs or lows of funds investing directly in the stock market.

Of course that doesn't mean to say there aren't good and bad multi-manager funds, because their performance can vary greatly.

To help investors we're launching a series of short guides highlighting the best performing multi-manager funds in different sectors.

Today we start with the Global Equities sector, which houses over 300 funds investing in shares in countries around the world.

There are 37 Multi-Manager funds in this sector but we have stripped out funds that don't have a five-year record and whose five-year returns fall below the average global equities funds.

That left us with just five. Click on the funds to find out more about them and their managers.

Top 5 Multi-Manager funds in Global Equities sector

Fund Manager 5yr total return % Sector rank
Jupiter Merlin Growth Portfolio John Chatfeild-Roberts & team 41.3 42 of 188
Margetts International Strategy Toby Ricketts 37.8 56
Jupiter Merlin Worldwide Portfolio John Chatfeild-Roberts & team 35.8 63
HSBC Global Growth Fund of Funds Julian York 34.3 66
HL Multi-Manager Special Situations Trust Lee Gardhouse, Roger Clark 34 68
Sector average   29.1  
FTSE World   43.6

Source: Lipper, a Thomson Reuters company. Performance up to 31 May

About the Top 5

The performance of the five global equities multi-manager funds in our table display a similar pattern over five years. They all fell less than world stock markets in the crash of 2008/09 and recovered broadly in line with the FTSE World index in the subsequent years, although they have not rallied quite as hard as the index in the past 12 months.   

The best peforming over five years is the £1.9 billion Jupiter Merlin Growth Portfolio, which is a star pick of our Citywire Selection team. Launched in 1992 this fund is run by a team led by John Chatfeild-Roberts. Since May 2008 the fund has come closest to matching the 43.6% return of the FTSE World index by growing its investors' money by just over 41% after charges. This ranks its 42nd out of 188 funds. Its stable mate, the Jupiter Merlin Worldwide Portfolio, is ranked 63rd with a 35.8% total return. The Growth Portfolio has a core holding of just over a third of investors' money in the UK, through funds such as AXA Framlington UK Select Opportunities and Cazenove UK Opportunities , although it also puts a quarter of its money in US funds and smaller amounts in funds investing in Europe, Japan and Asia Pacific. The Worldwide Portfolio does not invest in the UK, reserving its largest portion of money to the US, through funds such as Findlay Park American and Jupiter's own North American Income fund.

Second placed in our table is the Margetts International Strategy fund run by Toby Ricketts. Despite being launched in 1992 the fund has gathered only £64 million from investors, although performance has been relatively good. One interesting aspect of multi-manager funds is the different way they spread investors' money around, or 'asset allocate'. This fund, for example, has half of its investors' money in North America.

Julian York, manager of the HSBC Global Growth Fund of Funds, boasts a top Citywire AAA-rating for his performance on this and other multi-manager funds. The fund, which has over a third invested in two HSBC funds, has returned just over 34% in five years.

Lee Gardhouse, manager of Hargreaves Lansdown's HL Multi-Manager Special Situations trust, boasts a Citywire A-rating for this and other multi-manager funds he runs. He co-manages the fund with Roger Clark. The two hold nearly 40% of the fund in the UK through funds such as Majedie UK Equity and Old Mutual UK Smaller Companies . Its biggest holding is in the First State Asia Pacific Leaders fund.

Next week: we'll look at the top multi-manager funds in one of the big Mixed Assets sectors.

13 comments so far. Why not have your say?

Michael Harrison

Jul 12, 2013 at 17:15

Have a look at Cazenove Multi-Manager Global before you buy.

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philip gosling

Jul 12, 2013 at 17:32

Michael

Cazenove Multi-Manager Global is rated 3 Star by TRUSTNET and it obviously carries two charges though it is difficult out find out information on how they split charges down.

Is there a hidden gem here?

Thanks

Phil

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Michael Harrison

Jul 13, 2013 at 09:22

Phil

I take little notice of charges. For me the only criterion is performance.

Michael

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William Fowler

Jul 13, 2013 at 10:04

So, an additional layer of charges and none of them can beat the FTSE World index. Not for me thank you.

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Michael Harrison

Jul 13, 2013 at 10:28

An interesting observation. I will do some comparing.

Michael

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Michael Harrison

Jul 13, 2013 at 10:34

William

The world index I use is the iShares MSCI World Index (IWRD). The Cazenove MM Global Fund beats that index over 1, 3 and 5 years. (Source HL.) You had me worried for a moment!

Michael

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philip gosling

Jul 13, 2013 at 10:59

Always best using the same bench mark as the fund so you compare apples with apples.

Out of 1, 3, 6 months and then 1, 3 , 5 years only in the one month period does the IMA Global index bring in more at 5.1 compared to 4.7 . However, investing on one month basis is not of much value. Cazenove's longer term out to 5 years beats the index which is what everyone wants to do.

Performance from FE Trustnet

Cazenove Multi Manager

Global A Acc Fund +4.7 +5.4 +18.7 +35.8 +49.2 +67.9

v Index IMA Global +5.1 +4.4 +14.1 +26.2 +35.8 +45.3

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Michael Harrison

Jul 13, 2013 at 11:38

Yes that seems to be a satisfactory result. I have never thought of IMA Global as an index but rather "how the sector is doing". So IMA Global only allows one to see how that sector is doing. The sector could be doing badly while IWRD is doing well, for example. For me the the right apple is IWRD.

I am using a MM fund for money for my grandchildren because I don't want the responsibility of choosing funds and possibly failing the children, but I don't use an MM for my own investments - yet!

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Ranjith Withana

Jul 14, 2013 at 13:47

The point to consider as pointed our earlier is charges; which definitely higher than a the normal UT. Secondly, this also prevents switching to other UT in this era of volatility. Today it is Japan, one month later may be some Emerging markets come up.

Multi-manager is certainly not for me; for above two reasons

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Michael Harrison

Jul 15, 2013 at 14:58

The way I see it is if there is a need to switch to Japan (say) then the manager of the MM Fund will do it. That's the point - the responsibility for taking action is removed from the investor. Not everyone's cup of tea I know, but it can fit the circumstances of some investors.

Horses for courses!

Let us close this conversation.

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easy life

Jul 16, 2013 at 11:09

If you want global growth just pick a good fund. (not MM) as by definition the performance of the best fund will always be pulled down by the poorer performing funds.

Baillie Gifford Global Discovery beats most

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Davy Fisher

Aug 10, 2014 at 09:45

Any opinions on whether a Global or Mixed Asset Investment Trust is a better value option to a MM UT. I'm thinking of long term investment for some of my Cash ISA funds - say £20k to £25k

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foton

Jan 19, 2015 at 16:45

ny comment on HL Multi Manager fund about to be launched at £1 this week?

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  • Jupiter Merlin Growth Portfolio Acc
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  • Margetts International Strategy Acc
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  • Jupiter Merlin Worldwide Portfolio Inc
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  • HSBC Global Growth Fund of Funds Acc
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  • HL Multi-Manager Special Situations Trust Acc
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  • AXA Framlington UK Select Opportunities R Inc
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  • Cazenove UK Opportunities B Acc
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  • Findlay Park American GBP
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  • Jupiter North American Income Inc
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  • Majedie UK Equity A Acc
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  • Old Mutual UK Smaller Companies A Acc
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  • First State Asia Pacific Leaders A GBP Acc
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