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Making the Most of Funds With Multiple Subadvisors

Having multiple subadvisors makes investing a little trickier, but it's still worthwhile.

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Multiple-subadvisor funds are a breed apart. Let's take a look at how they work and how you can make the most of them. Some firms like Vanguard, Litman Gregory Masters, and American Beacon have multiple firms running sleeves of a portfolio at the same time.

Strengths
You should get added strategy diversification when you have multiple managers. Even a value fund could have strategy diversification if one strategy is deep-value, another is dividend-driven, and a third is relative-value. In addition, each manager and firm have strengths and blind spots. By combining a few of them, you tone down the extremes.

Russel Kinnel does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.