Mixing Multi-Strategy Funds?

[Aminatidi]

If you have a chunk to go in multi-asset with some already in RCP would you see a benefit in diversifying with a couple more options such as CGT and HMSF or are you simply creating a "global tracker" by not going 100% RCP as they already have a 3 page portfolio of diversification?

[Lootman]

I'd say there is more point to diversifying amongst such types of funds than there would be to diversifying into, say, six UK income funds or six global generalist shares.

And the reason is that these multi-strategy or asset-allocation or absolute return funds often choose very different ways of going about it.

So for instance CGT has always held a lot of debt securities and zeroes. PNL spreads itself over global shares and things like gold, US Treasuries and cash. RCP has a fair wodge in private equity whilst Ruffer had a lot in Japan last time I looked.

So the degree of dispersion in these types of unconstrained funds is greater than in funds that by definition are highly constrained and therefore fishing in the same pool. It is for much of the same reason that I never understood the appeal of Luni's self-styled "baskets" of similar and mostly UK-focused income ITs

[Aminatidi]

Yes thanks, makes sense, no point with six different General Smaller Cap funds for example.