Cost remains a big issue within the multi-manager arena, and Marcus Brookes, co-manager of the Cazenove Multi-Manager Diversity Fund, admits that since first entering the funds of funds space almost 15 years ago, double-charging has been a constant thorn in investors' sides.
"Certainly in the 1990s, funds of funds were prohibitively expense, which is why they did not catch on as quickly as they should have done. That really has now been addressed and if you look at the total expense ratio of the Cazenove Multi-Manager Diversity Fund, which stands at 1.69 per cent, it is very much in line with traditional long-only funds," comments Mr Brookes.
The aim of the Cazenove Multi-Manager Diversity Fund is to achieve long-term capital growth in excess of inflation from a portfolio invested across equities, fixed income and cash, as well as alternatives. Currently, Mr Brookes's defensive outlook is reflected in the fund's heavy weighting in cash and fixed income - just over 40 per cent.
The fund is also heavily weighted within the alternatives space, where some money has been made out of structured products. Here, Mr Brookes, and co-manager Robin McDonald, have deliberately stuck to those banks which they felt where going to be national champions. "We would rather have our counterparty risk with those banks that essentially the government will bail out. So, in France, it was BNP Paribas and in America it was Citigroup," says Mr Brookes. "There are times when volatility in the market is such that some of these structured products give you a very good payout profile. We will, however, not always own structured products - we will only own them when they offer good value."
| CAZENOVE MULTI-MANAGER DIVERSITY FUND | |||
|---|---|---|---|
| PRICE | 73.44p | 3 YR SHARPE RATIO | -0.02 |
| SIZE OF FUND | £329.80m | 3 MTH PERFORMANCE | 5.02% |
| No OF HOLDINGS | 28 | 6 MTH PERFORMANCE | 10.57% |
| SET UP DATE | 22-May-02 | 1 YR PERFORMANCE | 14.07% |
| MANAGER START DATE | 02/01/2008 (Marcus Brookes) 24/10/2007 (Robin McDonald) | TOTAL EXPENSE RATIO | 1.69% |
| 3 YR BETA | 0.68 | YIELD | 0.95 |
| FUND BENCHMARK | CPI + 4% | MINIMUM INVESTMENT | £1,000 initial, £500 additional |
| TRACKING ERROR | na | MORE DETAILS | www.cazenovecapital.com |
Source: Morningstar, Cazenove
Performance as at 11 November 2009
Top 10 holdings as at 30 September 2009
| Holding | Percentage |
|---|---|
| M&G Optimal Income | 11.11% |
| JPM Income Opportunity | 5.45% |
| Invesco Perpetual Corporate Bond | 4.69% |
| JOHCM UK Opportunities | 4.60% |
| Nevsky | 4.11% |
| First State Asia Pacific Leaders | 3.97% |
| Invesco Perpetual Income | 3.57% |
| Cazenove UK Absolute Target | 3.29% |
| BlackRock ML UK Absolue Alpha | 3.24% |
| OEI MAC | 3.09% |
Asset Allocation
| Asset Class | Percentage |
|---|---|
| Fixed Income | 24.19% |
| Equities | 28.49% |
| Alternatives | 30.78% |
| Cash | 16.55% |
