Seven Investment Management is to launch five Oeic funds of funds using a wider range of asset classes than normal at under 2% total cost.The launches, due to be announced this week, will allow investors to choose between cautious, moderately cautious, balanced, moderately adventurous and adventurous portfolios. The Cautious fund of funds is benchmarked 100% against gilts and the proportion of the equity benchmark increases by 25 percentage points for each subsequent fund as the proportion of bonds falls. Although benchmarked against the FTSE All-Share (equities) and All-Stocks (gilts) indices in these varying proportions, the funds can also invest in international fixed income securities and equities, unleveraged commodities, cash and property while remaining Ucits III-compliant and thus eligible for Isas. 7IM will provide the asset allocation with the aim of achieving 2-3% above the respective benchmark without increasing risk. Richard Timberlake’s Investment Manager Selection will choose the underlying funds held in each portfolio. These underlying funds will include 25% in trackers to aid tactical asset allocation switches while keeping costs down. The aim of the funds of funds is to have active asset allocation with the underlying funds bought at creation value. A fund of funds offers flexibility in buying and selling units at short notice, but usually at higher cost than using a manager of managers approach, which can take six months to change mandates. By buying at relatively lower costs the 7IM funds will keep the total expense ratios of the funds – which are expected to raise more than £100m this year – including the underlying portfolios, at less than 2%. Zurich Financial Services will provide an investment bond wrapper but, even including this cost, the TERs will be 2%. Comparable funds of funds are more expensive and the range is seen as competitive in cost to manager of managers rivals, such as Frank Russell and SEI.