This is not a vintage year for unit trust performance. In the first nine months less than 30 per cent of funds listed by Standard & Poor's Investors Services are making a profit. Many of those making money invest in sectors unlikely to attract the average Hong Kong investor. Products based on biotechnology and health-care stocks have led the way up, while down in the performance dungeons are the very stocks which once provided Asian investors with stunning performances - single Asian country products, Japanese technology plays and regional funds. The hardest hit investors have seen up to 70 per cent wiped off the value of their funds this year. Once again, it is time to rehearse that old mantra beloved by the grey-bearded advisors but so often derided by the whiz-kids: diversify, diversify, diversify. Simple enough advice, but in practical terms, how do investors spread the risk? Is it best to buy a single global fund, managed by one group, or build a whole portfolio of funds based on different geographical or industrial sectors? Finding one fund manager who can provide consistent performance is difficult enough, picking a posse of them is even more daunting. It won't be a cheap process. Each manager - with a few exceptions - will charge a front-end load and then there will be the annual management fees and other charges, not all of which are apparent. This problem is not restricted to private investors. Employers providing staff with pension schemes face the same problem. Companies usually give their pension business to two or more funds, which they pick with the help of trustees and actuaries or consultants. These managers will usually have to be pretty diversified, particularly if the company is running the sort of defined contribution, employee choice scheme now fairly widespread in Hong Kong. Now, a fresh approach to building a portfolio has arrived in Hong Kong. Last week, Bank of Bermuda launched its newly authorised All Points multi-manager fund. The good news is that it does provide a way of putting money into a range of products. The not-so-good news, at least for the average salary earner, is that it is aimed at high net worth individuals. Turn up at the offices with an envelope containing US$500,000 or more if you want to catch the bank's attention. Multi-manager funds do not have to be reserved for the better-off. In Singapore, DBS Bank already offers a multi-manager scheme operated by US funds group Frank Russell. The entry fee is the equivalent of HK$20,000 for a lump sum, or HK$8,000 a month for a regular savings plan. Bank Consortium Trust, the Mandatory Provident Fund provider put together by a group of Hong Kong's smaller banks, is using a similar scheme and pensions insiders expect the method to be more widely applied in the industry. Multi-manager funds are sometimes confused with fund-of-fund schemes in which the manager builds a portfolio from other funds. Bank of Bermuda and Frank Russell pick specialised fund managers and channel the cash flows according to their asset allocation requirements. Glenn Trotman, Bank of Bermuda's director of investments in Hong Kong, explained: 'Unlike a global manager who is an all-round athlete or decathlete, good at all disciplines but not excellent at any, our multi-manager brings leading managers in each discipline.' Among the stable of managers to which Bank of Bermuda trusts its funds are Alliance Capital, which manages US large capitalisation stocks, and Warburg Pincus, which invests in US small caps. European stocks are looked after by Invesco, while Global Asset Management's Paul Kirby handles the Japanese investments. Asia is handled by Schroders and the UK by ING Barings. In the fixed-interest sector, JP Morgan handles much of the portfolio. There is growing momentum in the UK to use this specialist approach to pension funds, where trustees have become disillusioned with the long-term performance of balanced fund managers, and even the so-called 'value' investors. Part of the debate there centres on the quality of manager. If Bank of Bermuda, Frank Russell or any group providing multi-manager products picks the wrong players, then the team won't score goals. Bank of Bermuda's Mr Trotman claims team selection is exactly what the bank brings to the party. It uses benchmarks - usually Morgan Stanley indices - against which to measure performance, and then depends on close monitoring. This year's performance figures for some of the Bank of Bermuda managers show that they have beaten the bear. Warburg Pincus' US small cap managers added 27.24 per cent to end-September, against a 5.84 per cent gain in the Russell 2000 Index, Invesco's European investors provided a gain of 15.4 per cent against the MSCI's 1.87 rise, and while Schroders' Asia product fell 20.65 per cent, they still outperformed the MSCI Asia Ex Japan, which slumped 30 per cent. That adds up to reasonable performance in a difficult year, but the price of repeating that will be eternal vigilance, and this will apply to all providers of similar products.