Fund Focus: Henderson Multi-Manager

By RICHARD DYSON
Updated: 05:42 EST, 2 September 2008

Multi-management - where investors place money with one fund manager who then picks others to invest it - is growing in popularity.

A good multi-manager will analyse other managers' performances, meet and quiz them personally, then parcel out investors' cash accordingly.

The multimanager will also take decisions about asset allocation, according to his view of where world markets are heading.

International asset management group Henderson offers three multi-manager funds, the biggest of which is the global Multi-Manager Growth fund. Manager Bill McQuaker says: 'The best managers have qualities in common - they tend to work extremely hard and be highly organised, efficient, energetic and brutally honest.'

He wants to see consistency of method, as well as good performance in managers he selects. With chosen managers in mind, he then decides about the portions to invest in different regions and sectors.

Currently, he thinks the UK's banks must be nearing rock bottom, so Jupiter Financial Opportunities is his biggest holding at almost 12%. The fund has a UK bent (11%), but invests globally.

McQuaker is negative on Asia, predicting that the West's slowdown will hit China's exports and has adjusted exposure accordingly. He also fears that commodity stocks, until now the stars of world markets, will cool.

Performance of multi-managed funds is hard to judge. There are no fund categories that adequately compare like with like. McQuaker's fund sits in the 'active managed' category, where it has tended to underperform.

Multi-managed funds are also expensive. The total expense ratio of this fund - a measure used to show overall annual costs to investors - is 2.35%. By contrast, Jupiter Financial Opportunities is 1.77%.