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Multi manager funds best long term

16/ 6/2008

MULTI-MANAGER investment funds are producing better long-term returns than conventional ones, despite higher management charges, according to research.

Both types of fund across all sectors performed badly during the past year, with conventional funds recording losses of between 5.2 and 12.3 per cent, while losses for funds with more than one manager ranged from 6.7 to 12.5 per cent.

Conventional and multi-manager funds also produced fairly similar returns over three years, according to Investment Life & Pensions Moneyfacts. But over longer periods of five and 10 years, multi-manager funds are clearly outperforming their conventional counterparts.

In the active managed sector, multi-manager funds produced average returns of 72 per cent over 10 years, compared with just 56.2 per cent for conventional funds.

The difference was even greater in the global growth sector, where, at an average of 73.1 per cent, 10-year returns on multi-manager funds were nearly double the 38.6 per cent made by conventional funds.