Funds of funds run by groups such as Vanguard, Premier and Jupiter are the most heavily researched multi-manager offerings with the professional investors using FE Analytics, research by FE Trustnet shows. 
Recent years have seen outsourced solutions such as multi-manager funds and model portfolios become more popular with UK financial advisers, as factors such as regulatory change mean they are spending less time on fund selection.
In order to find out which fund of funds products are at the top of professional investors’ research lists, we turned to the FE Analytics Market Intel tool. This reveals the research behaviour of the advisers and other professionals using FE Analytics.
After using the tool to determine the most viewed fund factsheets from the UK multi-manager universe over the past 12 months, we found that the most popular was an index-tracking option: Vanguard LifeStrategy 60% Equity.
Performance of fund vs sector since launch
Source: FE Analytics
The Vanguard LifeStrategy range, which comprises five funds with varying levels of equity exposure, have proven to be immensely popular since its launch in June 2011 – especially among financial advisers.
As the above chart suggests, part of this is down to strong relative performance. The Vanguard LifeStrategy 60% Equity fund has made a 74.13 per cent total return since launch, ranking it in the top quartile of the IA Mixed Investment 40-85% Shares sector; most of the other funds are also outperforming their sector.
Another factor is cost: the funds in the range haver an ongoing charges figure of just 0.22 per cent. For this, investors get exposure to a static allocation portfolio built from underling Vanguard index trackers, which is rebalanced automatically to avoid drift.
Reflecting this popularity, the second spot on the list of the most frequently viewed multi-manager funds is also taken up a member of the range: Vanguard LifeStrategy 40% Equity.
Indeed, as the table below reveals, all five of the Vanguard LifeStrategy offerings are among the 15 most popular multi-manager funds being researched on FE Analytics.
Source: FE Analytics Market Intel tool
The five funds aren’t the only index-tracking multi-manager options to be favoured by financial advisers.
According to the FE Analytics Market Intel tool, several funds from L&G’s Multi-Index range – which are managed by Justin Onuekwusi and are built around Legal & General index trackers – appear on the most popular list.
However, most of the options on the list are multi-manager offerings that concentrate their efforts on active funds – especially those with an income mandate.
Premier Multi-Asset Distribution, which is managed by David Hambidge, Simon Evan-Cook, Ian Rees and David Thornton, is third on the list and has a clear bias towards active funds thanks to its focus on products run by “carefully selected, specialist fund managers”.
A recent study by FE Trustnet ranking members of the IA Mixed Investment 20-60% Shares sector on a wide range of performance and risk metrics put the £1.2bn fund in first place after finding it was consistently in the peer group’s top deciles for most of the 10 metrics examined.
The fund also won fans in the investment analyst community. Square Mile Investment Consulting & Research, which gives it an ‘AA’ rating, said: “We have a high regard for this focused and stable team that is led by the experienced David Hambidge. They have an excellent appreciation of the outcomes that investors seek and this well diversified portfolio has historically generated performance that has met its objectives.”
Performance of funds vs sector over 5yrs
Source: FE Analytics
Other popular multi-manager funds reflecting this demand for income are also found towards the top of the list.
The £3bn Jupiter Merlin Income Portfolio, which is headed up by the FE Alpha Manager duo of John Chatfeild-Roberts and Algy Smith-Maxwell alongside Amanda Sillars and David Lewis, is another well-known offering.
The funds in the Merlin range are macro-led and the Merlin managers favour active funds that they believe are the correct choice for the expected macroeconomic environment. Top holdings include CF Woodford Equity Income, Fundsmith Equity and M&G Strategic Corporate Bond.
Gary Potter and Rob Burdett’s £1.2bn F&C MM Navigator Distribution fund is another multi-manager fund that has been heavily researched by financial advisers. In contrast to the above Jupiter fund, this portfolio often has exposure to smaller, less well-known active funds.
Square Mile, which rates the fund ‘AA’, said: “[Potter and Burdett’s] main strength is uncovering talented investment managers, sometimes in the early stages of their career, and backing them over the longer term. The team has excellent knowledge of the industry and we very much view them as sensible investors.”