Managers defend single strategy funds

Multi-managers have defended single-strategy funds amid claims from Chelsea Financial Services that there is no value in the strategy.

Chelsea Financial Services’ latest Relegation Zone shows 24 multi-manager funds in the 101-strong list.

“We are opposed to single-strategy offerings as we feel there is no value in paying an increased total expense ratio”

Darius McDermott, the managing director of Cheslea, has questioned the future of single-strategy offerings, claiming that it is difficult to justify the increased total expense ratio.

He says: “We are opposed to single-strategy offerings as we feel there is no value in paying an increased total expense ratio for a multi-manager fund in a sector that has plenty of other choices.” (article continues below)

Craig Heron, a director of fund of funds at Henderson, says: “I can see the point that these funds are not as popular as others, but we have a European single-strategy multi-manager fund that is one of the best performers.”

Scott Spencer, a multi-manager fund manager at Aberdeen, says: “There are reduced assets in that space but there is still demand and we can add value through blending large and small caps as well as growth and value.”