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Issued by 1OAK Capital Limited, authorised and regulated by the Financial Conduct Authority.  1OAK Capital Ltd (1OAK) (Registered in England & Wales Number: 06890293; FCA registration number 501453) provides fund management services for its customers. 1OAK Capital Limited is authorised and regulated by the Financial Conduct Authority. Registered Office of 50 Sloane Avenue London SW3 3DD.

Both Multi-Asset Funds (MAF) and Managed Portfolio Services (MPS) have become increasingly popular for advisers who outsource the investment management of client assets and so focus on financial planning. 

In this note, we look at the questions that advisers may want to ask when picking an outsourced solution and then identify the similarities and the differences between Multi-Asset Funds and MPS. We conclude that these two alternatives have more in common than separates them. The choice of MPS or Multi-Asset Fund is likely to be made based on availability, the platform that the investor uses and the investor’s preference.

At 1OAK, the holding report we offer aims to bridge the gap between Multi-Asset Fund and Managed Portfolio. The holding report is a customisable report that shows the detail of a clients holdings through the 1OAK Multi-Asset Fund. It allows a client to see what assets they hold, the split between strategy components and the geographic split.

What should advisers consider when selecting an outsourced investment solution?

Before selecting any outsourced investment service, there are several questions that advisers should ask. Advisers and investors must understand the philosophy and process that drives the investment process. This is true for Managed Portfolios and Multi-Asset Funds alike. Investors should be able to understand what the service aims to offer, the objectives and the constraints. Risks must be clearly articulated particularly if they are not obvious (like liquidity or investments in esoteric assets that have unusual risk/return profiles).

What is the objective?

Is the manager aiming for capital growth, income or a mix of both? Is the manager aiming to generate absolute returns or better returns than a benchmark? 

What can the portfolio hold?

Most Multi-Asset Funds and MPS will hold equities and bonds. Are there other assets that can be held? Many portfolios may include gold or precious metals, commodities, property, alternatives, 

What is the investment management process?

How are assets selected for the portfolio? What is the investment process?

What are the constraints?

Is the portfolio restricted in any way? Are there any markets or types of asset that are excluded? Are there any caps or limits on the portfolio’s exposure, either in terms of absolute limits or deviation from the benchmark? How liquid is the portfolio - can investors buy and sell whenever they want? Can the portfolio include derivatives?

Direct investment or collectives?

Both Multi-Asset Funds and Managed Portfolio Services can hold funds, investment companies and direct investments. Funds and investment companies can offer diversification through a single investment but incur an additional layer of costs. There will typically be costs and tax associated with buying and selling direct investments.

Active or passive asset allocation?

Asset allocation is perhaps the primary driver of returns, so it’s essential to understand the asset allocation process. The asset allocation may be fixed or actively managed. The asset weights may be determined by a process that aims to manage volatility or improve the risk/return profile. If the asset allocation is fixed, why have the set weights been chosen? If the asset allocation changes or is managed, what process is used? 

Active or passive asset selection?

Where the portfolio invests using funds, these may be passive index-tracking funds or active funds. Increasingly there are funds that offer thematic exposure or which implement a systematic strategy that bridges the gap between active and passive funds. 

1OAK Multi-Asset Funds

The 1OAK Multi-Asset Funds are daily traded UCITS funds. The asset allocation is active and guided by Blackrock, the largest asset manager in the world. 1OAK use Blackrock to set the exposure to each strategy component. 1OAK focus on implementing the asset allocation as efficiently and effectively as possible using passive ETF’s and index funds to reduce costs and improve performance. We believe that active asset allocation is important to make sure that a portfolio is best positioned to benefit from prevailing conditions. Using guidance from Blackrock allows us to benefit from expert input from the largest asset manager in the world. Our view is that actively managed funds are almost certain to be more expensive and may or may not offer an additional return.  

Similarities and differences between Multi-Asset Funds and MPS. 

Perhaps the easiest way to think about the differences between an MPS and a MAF is that the fund offers the managed portfolio service through a single investible vehicle. An investor that uses a MPS will own each of the underlying assets directly. This will affect the way that the investment is managed and administered. It will affect costs and the way that costs are reported. The table below illustrates some of the differences between Multi-Asset Funds and MPS



Multi-Asset Fund

Managed Portfolio Service


Funds are widely available through wraps, bonds, investment platforms, fund supermarkets and directly from the administrator. Funds can be made available quickly and easily where there is demand. 

Most managers will make their MPS available directly to investors. Many MPS are now available through several wraps and platforms. Making a MPS available through a third-party administrator requires non-trivial onboarding. There are legal and operational arrangements that are specific to each platform. As a result, most MPS are available through a limited range of third party administrators. 


UCITS funds offer investors the highest level of safeguarding. There are multiple layers of governance. Valuations are checked, trading is subject to rigorous regulations. 

MPS services offer investors a high level of safeguarding. Administration, trading and valuation are usually the responsibility of the investment platform. 

Trading costs

The fund will pay the costs of buying and selling investments. The institutional managers that run funds can negotiate very competitive brokerage rates. Managers of funds are free to trade as required and react immediately to changing circumstances. Managers have a regulatory responsibility to ensure best execution. 

Investors may be charged for purchases and sales of assets within a managed portfolio service. Platforms will usually levy a transaction fee. In some cases, these may be reduced by bulking many client orders together. As a result, managers tend to reduce the frequency of rebalancing trades. 

Tax considerations

Generally, there is no tax event for an investor when a fund buys and sells holdings. The investors’ tax event is usually restricted to when an investor buys and sells the fund. 

Every purchase and sale of an asset within a managed portfolio service can create a tax event for an investor. Income received can generate a tax liability. This can mean that an investor has no control over the timing of the realisation of gains and losses. It is a factor that causes managers to trade less often. 


Investors will be able to see the number of units or shares they own of a fund and the price of that share or unit. This allows the investor to track the value of their investment. The fund fact sheet will show additional detail of the assets held by the fund.

Investors own each asset held in their portfolio. Their valuation will usually show their positions line by line. All purchases, sales and income payments are reported individually. 

FX hedging

Funds can set their own policy to hedge FX exposure. Funds can invest in FX hedged collectives or use FX derivatives to hedge assets that are denominated in a different currency to the base currency. 

MPS may buy FX hedged funds but are not able to offer an FX hedging overlay. 


The distribution share class of most funds will offer a regular income payment. 

Investors will receive dividends and income payments from the assets that they hold in the MPS. These may be bunched together or spread through the year.

Costs and charges

The fund has to bear the asset management charge levied by the investment manager, the costs associated with administration, custody and valuations, and the costs associated with any investments. 

The costs associated with a managed portfolio are charges separately by the various parties involved. The manager will receive an AMC. The administration platform will charge for custody, valuation, administration and portfolio transactions. Where the MPS holds funds, the costs and charges associated with these are charged by the fund manager. 

Investment and redemptions

Investors can buy and sell shares in funds as and when they want. There are usually no penalties, and the costs are born by the fund - although the investment platform may charge a fee. This makes funds an ideal vehicle for both lump-sum and regular savings. 

When an investor buys or sells their investment in a MPS, they have to buy and sell each of the MPS assets. The platform may charge a brokerage fee on each transaction. This can make it uneconomic to use an MPS for regular savings. Investors need to buy and sell a sufficient value for the trading costs to be reduced to an economic level. 

Investment restrictions

The UCITS rules permit funds to hold funds, investment companies, ETF’s, shares and bonds. There are strict limits on how much of any asset a fund can hold. Funds can use derivatives for efficient portfolio management and reduce risk. There are limits on illiquid assets that are designed to protect investors. 

Managed portfolios are usually restricted to holding funds, investment companies, ETF’s, shares and bonds. 



Multi-asset funds and managed portfolio services offer clients access to professionally managed portfolios that have diversified exposure to equities, bonds and alternative assets. They can both be part of a central investment proposition. They both preserve the importance of the relationship between adviser and client. The good news is that advisers don’t need to make a binary solution. In many cases, both solutions can be available, and advisers can choose the best service for each client. 

Perhaps the main disadvantage of the Multi-Asset Fund is one of perception. When an adviser recommends a MAF as a core holding, all the client sees in their valuation is a single line item. This does not look diversified - although of course, it is. The Multi-Asset Fund can represent a broad spread of equities, bonds and liquid alternatives. It can include a currency hedging strategy. The manager can be using efficient portfolio management techniques to improve performance and reduce risks. The costs of buying and selling assets are low, allowing the manager to react to events as required. But this is summarised in a single line. 

Every fund and security held in a MPS, by contrast, will be shown individually. Clients will receive notifications of all trades. Income payments will be detailed. Purchases and sales will result in tax events. This can seem to the client to be a more bespoke and sophisticated service. The adviser may have a more important role - helping with tax calculations and consolidating the returns. 

For most clients, there may not be a choice between a MAF and MPS. Multi-Asset Funds are more widely available and can be onboarded more easily to the platforms that clients use.

Where a Multi-Asset Fund and MPS are available side-by-side on the same platform, the choice may be down to investor preferences. Some will want to see the level of detail that an MPS offers. For others, this level of information can be confusing and off-putting. At 1OAK, the holding report we provide aims to bridge the gap. The holding report is a customisable report that shows the detail of a clients holdings through the 1OAK Multi-Asset Fund. It allows a client to see what assets they hold, the split between strategy components and the geographic split.