is that, as previously mentioned, smaller programs that invest in one single-manager mutual fund per asset class tend to have a higher concentration of active management risk in the overall plan. Another drawback is the requirement to monitor the manager's performance, style consistency, risk, and so forth. In response to these issues that exist in single-manager mutual funds, there now exist a number of commingled vehicles in the marketplace that combine managers together to diversify active management. These commingled vehicles, known as multimanager portfolios, combine managers usually in the same asset class and/or style (e.g., large-cap value, high-yield fixed income) and are actively managed by a sponsor. The sponsor assumes fiduciary oversight of the portfolio and can actively fire and hire managers within the vehicle. Multimanager portfolios provide investors with access to a more diversified set of managers all within the same vehicle. Best practice in multimanager portfolio construction attempts to maximize the expected return per unit of risk of the portfolio, which requires not only understanding manager style, but also risk budgeting and the quantitative monitoring of return volatilities and correlations across managers. Many multimanager portfolios in the marketplace are not created with this precision or risk monitoring, but rather they are created by marketing organizations that market access to a combination of well-known investment management brands. While multimanager portfolios can provide access to good managers, the improper combination of managers can result in a concentrated risk profile that detracts from expected excess returns. Importantly, multimanager portfolios are not just for smaller and medium-plans. Larger plans can use multimanager portfolios in certain asset classes to streamline their investment process by outsourcing manager selection and portfolio construction within the multimanager portfolio, thus allowing the investment team to focus on areas where they have relevant expertise or interest. Additionally, many investment teams use multimanager portfolio where the investment process is more complex or less well known and where the asset class is complex, volatile, or less mature than other asset classes. As with single-manager mutual funds, investors can use the portfolio level excess return, tracking error, and information ratio targets as inputs into the overall risk budget. PLAN SIZE: COSTS While the level of costs associated with running an investment program can vary dramatically based on the size of the program, the categories of cost are predominately the same. Investment programs create costs from: II Investment management-the costs paid directly to those managing the portfolio. II Custody-the costs paid to the custodian bank for holding the assets. II Transaction costs-the costs paid to brokers and intermediaries for providing liquidity. II Administration-the costs paid to the CFO, pension fund oversight department, consultants, lawyers, accountants, transfer agents, payment agents, technology, and so on.