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Investment  >  Our Proposition  >  Manager of Managers  >  What are Manager of Managers (MoM)

What are Manager of Managers (MoM)

Scottish Life offer the opportunity to invest in Manager of Managers funds through our partnership with Close TEAMS. We offer a range of UK or Global Equity funds with varying performance targets.

The Manager of Managers concept is based on the principle that different managers subscribe to different investment styles and being unduly exposed to one particular style can affect returns.

Managers will either be 'active' or 'passive'. An active fund manager uses research and market forecasts to select shares that the manager feels will increase in value over time. Whereas a passive fund manager usually tracks an index and mirrors the make-up of that index.

Of the 'active' fund managers, some are 'value managers'. This means that they tend to invest in companies that are quoted on the stockmarket but whose share prices, they believe, are undervalued. Others are 'growth managers', who invest in companies which they believe have significant growth potential that has not yet been recognised by investment markets. Both styles have their advantages. However, they tend to complement each other. When the value manager is performing well, the growth manager's returns will tend to be lower and vice versa. The ideal then, is to adopt an approach which balances the two as this helps to achieve a more consistent return at the same time as reducing risk. The diagram below shows how this is intended to work.

Investment returns may fluctuate and are not guaranteed. The price of units can go down as well as up.  Past performance is not a guide to the future.

Fund managers monitored by professionals

The investment experts at Close TEAMS constantly review the performance of funds and managers. They use this information to identify the managers that offer the most attractive prospects for growth.  Then they choose a number of these managers and bring their expertise and skills together in a single fund choice. The chart below shows how this could work for an example fund.

The beauty of this approach is that it allows a spread of investments across a range of managers.  As the manager of managers, Close TEAMS take on the responsibility for selecting, monitoring and, where appropriate, replacing the investment managers that make up these funds.