abrdn shuts Strategic Investment Allocation fund
The fund has lost 36.1% over the last five years, while the IA Specialist TR sector is up 20.1%.
In a letter to investors seen byInvestment Week, the firm said the fund has declined significantly in size in recent years, from £1bn to the current level of approximately £62.1m as at 20 June.
The Edinburgh-based asset manager also noted the fund has not delivered the intended target performance for investors and it expects outflows and reduction in net asset value to continue.
abrdn calls time on MyFolio Monthly Income range
«Small funds face a number of operating difficulties as they are unable to benefit from economies of scale,» abrdn wrote in the letter.
«This may lead to problems in buying and selling assets at a reasonable price, when in turn may lead to compromised investment performance and proportionally higher costs, to the detriment of unitholder value.»
According to FE fundinfo, the fund has lost 36.1% over the last five years, while the IA Specialist TR sector is up 20.1%. Over a one-year period, it is down 24.1%, while the sector is up 3.9%.
The closure is part of a fund consolidation programme outlined last summer. Having reviewed around 550 funds, the company concluded that 20%, with an AUM of £7bn, should be merged or closed.
abrdn closes three 'subscale' funds in consolidation push
«As outlined last year, we are in the process of merging or closing over 100 funds which are subscale or not aligned with our core strengths,» abrdn said.
«The consolidation programme is reducing duplication, simplifying our product offering, freeing up resources and will deliver a product set that is better aligned to our key strengths and to client demands. We have already made good progress and expect the work to
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