Cazenove Multi-Manager Diversity is certainly an investment in tune with the zeitgeist. A fund of funds, it seeks long-term growth in excess of the UK consumer price index (CPI), whose annual growth rate hit 4 per cent in January.
In order to generate steady rates of return with significantly lower risk than more traditional funds, the fund needs to smooth out returns during bad years. It did this in 2008, when it lost considerably less than the average cautious-managed fund.
It uses tactical asset allocation to adjust the portfolio, and increase or decrease the percentage held in each asset class depending on where managers believe we are in the market cycle. It also takes into consideration the current investment opportunities.
Different asset classes are blended so as to participate in equity-market upside while limiting downside, although the fund has a broadly fixed strategic asset allocation determined by long-term returns, volatility and correlations between the asset classes.
The fund's managers, Marcus Brookes and Robin McDonald are experienced fund of funds managers, having previously run multi-manager portfolios at Gartmore, Insight and Rothschild Asset Management.
Another attraction of this fund of funds is its reasonable total expense ratio of 1.46 per cent, a figure that's lower than some single-asset funds.
CAZENOVE MULTI-MANAGER DIVERSITY A ACC (CBUBPA) | |||
|---|---|---|---|
| PRICE | 80.64p | SHARPE RATIO | 0.31 |
| SIZE OF FUND | £571.4m* | 6-MTH PERFORMANCE | 5.21% |
| No OF HOLDINGS | 25* | 1-YR PERFORMANCE | 7.71% |
| SET UP DATE | 22 May 2002 | 3-YR PERFORMANCE | 4.58% |
| MANAGER START DATE | 24 October 2007* | TOTAL EXPENSE RATIO | 1.46% |
| ANNUAL FEE | 1.00% | YIELD | 0.51% |
| BETA | 0.67 | MINIMUM INVESTMENT | £5,000 |
| STANDARD DEVIATION | 8.03% | MORE DETAILS | www.cazenovecapital.com/funds |
Source: Morningstar, *Cazenove Capital Management.
Performance data as at 18 February 2011.
Top 10 holdings as at 31 January 2011
| Holding | Percentage |
|---|---|
| M&G Optimal Income Sterling | 7.03 |
| Jupiter Absolute Return | 6.98 |
| JPM Income Opportunity | 6.88 |
| Invesco Perpetual Income | 6.28 |
| JOHCM UK Opportunities | 5.32 |
| Invesco Perpetual Tactical Bond | 4.4 |
| Findlay Park America Smaller Companies | 3.7 |
| Eclectica | 3.33 |
| First State Asia Pacific Leaders | 3.03 |
| Majedie Tortoise | 3.02 |
Asset allocation
| Asset | Percentage |
|---|---|
| Alternatives | 28.74 |
| Equities | 28.68 |
| Cash | 22.16 |
| Fixed income | 20.42 |
