News
Fund of Funds
22/06/2009
Why Fund of Funds?
Everyone would like to see good returns from their stock market investments. However, with so many funds to choose from how do you know if you will pick the right ones to achieve these returns? This could be eradicated by selecting a Fund of Funds investment where you let the experts do all the hard work of selecting and managing your funds. Fund of Funds spread the risk of what you invest in across a wide range of assets to make your money work harder.
Fund of Funds - the basics
With over 2,000 funds available in the UK alone, researching and making your own investment decisions is no easy task. To make things even more complicated, you also have the added worries of trying to diversify to make sure that you get an appropriate spread of assets within your investment, plus continually monitoring the impacts of ever changing economic conditions on your investment.
From a quiet start in the 1980s, the Fund of Funds industry has grown rapidly in the recent past, both in terms of the assets under management in existing Fund of Funds and new entrants to the market. They now represent one of the fastest growing sectors in the fund management industry.
Under a Fund of Funds your investment is divided across a range of funds which a Fund of Funds Manager believes to be the best in the market.
Each Fund of Funds manager has their own investment approach and, typically, they:
- Review the general economic climate,
- Decide an appropriate asset allocation,
- Identify the fund managers that are specialist in the chosen areas and
- Invest in their funds.
This process may seem relatively simple but it involves the Fund of Funds Manager holding various meetings with the individual fund managers to discuss numerous factors such as investment styles, geographical spread, stock selection ability and risk management to consider. The Fund of Funds manager is supported by a specialist team who provide a strong research infrastructure which enables the manager to make informed investment decisions. This in depth research takes a great deal of time and expertise which is not available to most investors.
The key benefits
However deciding on an appropriate asset allocation and choosing the most appropriate funds is only the beginning. One of the key benefits of a Fund of Funds is their ability to actively manage your fund to ensure it constantly adapts to the ever changing economic conditions and investment environment. Researching and monitoring performance, asset classes and investment strategies, as well as keeping abreast of fund manager changes, is a tedious task of which many investors simply don’t have the time or resource to do. Investing in a Fund of Funds means investors benefit from the experts doing this on their behalf.
As we consider the affects of the unprecedented market conditions we have endured over the last 2 years, it is no surprise how quickly Fund of Funds have evolved. Fund of Funds offer a one-stop solution to many of the problems faced by investors and the only decision they need to make is which Fund of Funds best suits their risk and reward profile.
Skipton Financial Services are whole of market advisers and will only recommend ‘unfettered’ Fund of Funds as these allow the fund manager to consider funds across the entire market place and not just from their own investment house.
Our team of in-house experts carefully select the top performing Fund of Funds management teams available in the marketplace to ensure your money is working as hard as possible to achieve your objectives.
It is never easy making a decision on what fund is right for you...let alone keeping your eye on it to ensure it’s working as hard as it can to achieve the goals that you have set out. What Fund of Funds offer is a sensible way of achieving consistent returns by allowing the experts to manage your investment.
To find out more about any of
the services we’ve mentioned
simply:
- Contact your SFS Financial Adviser
- Call a member of our Client
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