The S&P Southern Africa fund is being merged into the S&P Emerging Markets unit trust, writes Dylan ...
The S&P Southern Africa fund is being merged into the S&P Emerging Markets unit trust, writes Dylan Emery.
The portfolio was officially disbanded on 14 July, almost exactly five years after its inception. The assets have now been transferred to the generalist vehicle.
Michael Hughes, head of emerging markets at Flemings, said: "The fund has been closed because it was not really deemed to be of economic size by the markets. Single country funds have not been that attractive generally."
Over three years the Southern Africa fund is ranked 29 out of 29 in the Global Emerging Markets sector, while the generalist vehicle is ranked eight.
Hughes said: "Investors in the Southern Africa Fund seem to be remarkably passive.
"They have not voiced any opposition or any support but then they are being given the chance to invest in one of the most successful unit trusts in the group."
S&P Emerging Markets won the best emerging market fund in this year's Investment Week Fund Manager of the Year Awards.
Hughes said the transfer of assets should be smooth. Clive Lloyd, who managed the Southern Africa fund is also co-manager of the Emerging Markets unit trust, alongside Austin Forey.
Investment strategies for each portfolio have not been changed to facilitate the transfer, Hughes said, even though this will increase the overall South Africa exposure of S&P Emerging Markets in the short term.
Instead stocks in the former South African portfolio that do not match those in the Emerging Markets portfolio will be sold, the brokerage fee being paid by the South African fund.
The money will then be put into S&P Emerging Markets, where it will be used to buy stocks that rebalance the portfolio so it does not change its overall country weighting.
The buying costs will be covered by the Emerging Markets Fund.
Consistency and compliance vs. slower reaction time
Search for replacement to begin imminently
60+ £300bn ISA savings
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Total funds on list rise from 26 to 58