“On the question of fund size, commercial viability is largely decided by cost rather than size, and our funds are administered in-house on a highly cost-effective basis.”
Legg Mason also has two funds in the list, including the Legg Mason Continental European Equity fund. A spokesperson for the firm says it has “no immediate plans to rationalise or change these products. We are, however, constantly looking at the funds in our range”.
Adrian Lowcock, senior investment manager at Hargreaves Lansdown, notes: “It is important to consider when the fund was established. Some management groups like to set up funds years ahead of when they think the market will become more interested in the fund.
“Likewise, if an asset class becomes unpopular with investors, you could see money flow out of the sector and funds no longer become viable. Companies also evolve and expand or contract, so funds are launched into new markets or closed as a group refocuses the business. Part of a healthy industry is that it’s always evolving.”
The largest collection of funds in the list are seven CF funds that include products run by Danske Bank and Kleinwort Benson. A spokesperson for Capita Financial, the ACD for these funds, states: “Capita Financial Managers keeps under review the position of small funds in accordance with its relevant policy and the specific circumstances of each fund and its underlying investor base. It is inappropriate for us to comment on individual funds, as any proposed action would first be communicated to investors.”
Among the 18 funds that have recurred from the 2012 list, a spokesperson for the Swip Absolute Return Macro fund notes: “We recently repositioned the investment strategy of the fund to further diversify its investment approach to focus not only on equity and bond strategies but to incorporate a larger proportion of relative value investments to drive fund performance.
“This qualitative approach is in the process of being complemented by a quantitative investment dimension managed within a robust risk framework. We believe these changes will help deliver improved performance going forward.”
Other recurring funds include the Clerical Medical FTSE 100 tracker, which a spokesperson notes has appeared to underperform because the sector mainly consists of actively managed funds.
Meanwhile, Ralph Baber of Slater Investments points out that the MFM Bowland fund was established for one individual investor in 1999 and has never been marketed. As such, there are no plans to close the fund or raise additional capital for it.
With market conditions looking optimistic, at least for the moment, many of these funds could improve performance, which could lead to more assets and thus increase their appeal to investors.
