Umbrella funds, where easy switching can take place between different classes to adapt to different investment conditions, have become popular.

Number of investment funds: 17, 3 of which are umbrella funds - in total it makes 34 separate portfolio under management.

In such instances a managed currency fund or an umbrella fund offering a choice of separate currencies would be more appropriate.

Investors pay the management costs of whoever is sponsoring the umbrella fund, but they also pay all the expenses of the underlying funds.

The umbrella fund structure makes it cheaper for investors to move from one sub-fund to another and save the investment manager costs relating to regulatory duplication.

The funds were launched internationally in October 1990 as part of the Luxembourg-based umbrella fund, Fidelity Funds.

CNIM, the investment management arm of National Westminster, is the latest house to launch an umbrella fund of this type.

The initial charges on the umbrella fund are 5.75% for equity funds and an annual 1.75% for the Templeton Emerging Markets Fund.

An umbrella fund is a collective investment scheme that exists as a single legal entity but has several distinct sub-funds which, in effect, are traded as individual investment funds.

BNP Paribas began a campaign in November for its Parvest umbrella fund featuring the face of the Italian supermodel Carla Bruni.

They are mostly commonly used in the formation of collective investment schemes as umbrella funds and for the formation of captive insurance companies (typically a variation of a "rent-a-captive").

Of the 16 funds that made up our Global Strategy umbrella fund when it was launched five years ago, no less than four have come first in their respective sectors over this period, according to Finstat.

Before the Finance Act 1989, switches within offshore umbrella funds did not count as realisations for either capital gains tax or income tax purposes, but they are now regarded as disposals and so chargeable to CGT and income tax.

For those who prefer an open ended fund, Templeton Emerging Markets Fund is available within the Luxembourg-based umbrella fund, Templeton Global Strategy SICAV, which is a UCITs and so can be sold in any EC country.