For this reason, Mona Shah, assistant fund manager to David Coombs on the Rathbone multi-asset portfolios, often turns to boutiques when she is finding it difficult to locate a fund to meet their strict risk-rating and performance criteria.
“Bigger funds are not necessarily better funds, often as funds grow their performance becomes less impressive,” Shah explained.
One example she gave was of the Schroder UK Mid 250 Fund, run by Andrew Brough, which reached £2.9bn at its peak. Subsequently its performance declined and now it has only £1.1bn AUM.
Shah said that where appropriate the multi-asset team try to use boutique funds and to generate ideas she will ask boutique managers who they have already done due diligence on.
“Investing in boutique funds is not necessarily riskier, but high quality due diligence has to be done.”
Here Shah reveals the five boutique funds you should know about, so you can get in on the act.