Umbrella investment products are offered by many offshore unit trust management companies. These umbrella investment products wrap together underlying funds or specialist managers to give you a balanced choice of different funds. The argument for using these funds is that one management company does not necessarily have the full range of expertise to cover all regions, specialist sectors and styles. The two options offered are:
Funds of Funds: These unit trust funds wrap together different funds of different management companies, selecting what are considered to be the best funds in the various categories. If you select this route you should check the different types of funds to ensure they meet the demands of an investor in your country. The only decisions the fund of funds manager makes are the choice of funds and the weighting of the different funds. The underlying investment decisions are at the discretion of the various selected fund managers.
Multi-manager Funds: These funds bring together different portfolio managers giving them assets to manage. Rather than picking individual unit trust funds, multi-manager fund managers tend to pick individual investment specialists or specialist investment teams. The assets allocated to each to each specialist may or may not be managed within another unit trust fund. Multi-manager managers tend to have more to say about the underlying investments than do managers of funds of funds.