Skandia Investment Management's Global Best Ideas fund, which launched in June, will not impose any sectoral constraints on managers running the 10 separate mandates.
The approach could ultimately lead the portfolio to have a 50% weighting in an individual sector, but the firm's CIO Alan Durrant said that, as the overall fund blends the styles of 10 diverse managers, this would be unlikely.
However, he pointed out that while its high level of diversification could make the fund appear a low-risk proposition, the fact it has no constraints could mean the opposite, depending on whether it is viewed on an absolute or relative basis. This has led to the firm not applying a risk rating to the portfolio.
In terms of asset allocation, which is monitored by the CIO on a daily basis, with geographic weightings rebalanced annually, Durrant confirmed the UK portion of the overall portfolio is not being evenly split between the five UK managers.
New Star's Stephen Whittaker, Merrill Lynch's Richard Plackett and Gartmore's Ashley Willing will each run 10% of the total portfolio, while Artemis's Mark Tyndall's mandate will make up 12.5% of the whole and Axa Framlington's Roger Whiteoak's will account for 7.5%.
While Skandia has spent two years assembling the line-up for the portfolio, Durrant has the power to be able to get rid of a manager with one day's notice and, if a manager wants to quit the fund he is required to give six months' notice.
Improving portfolio diversification
Hanging on the telephone
German recession concerns