New Star is responding to poor performance on two of its smaller funds by announcing merger plans.
The firm says its £5.5m Japan fund will merge with the £105m New Star Pacific Growth Unit Trust, while its £7.7m North American fund will merge with the £12.6m New Star American Portfolio, a fund of funds offering.
New Star says it hopes consolidating the funds, both acquired from Edinburgh Fund Managers five years ago, into “more established products with broader remits” will lead to stronger returns for investors.
Amanda Gold and Greg Kerr, the current managers of the New Star Japan fund and the New Star North American fund respectively, will further focus on their institutional responsibilities at New Star.
New Star says its Pacific Growth Unit Trust, managed by Ian Beattie, has access to a broader range of Asian countries than its Japan offering and can therefore access a greater number of stocks.
It says the fund is a more diversified product and the merger “should lead to lower risk for investors”.
The New Star Japan fund fell 13.77% over one year, according to Lipper at 23 April, and is fourth quartile over one and three years in the IMA Japan sector.
Meanwhile, New Star says as the American Portfolio is a fund of funds product, investors should benefit from a “broader spread of underlying investments and a greater degree of flexibility”.
The fund, managed by Mark Harris, is predominantly invested in North America but has, at times, put investors' money in funds covering Central and Latin America.
The New Star North American fund is first quartile over one month in the IMA North America sector, according to Lipper, but is fourth quartile over one and three years.
The multi-manager New Star American Portfolio is down 7.22% over one year, according to Trustnet at 30 April, but up 20% over three years.
Mark Skinner, managing director of New Star Investment Funds, says: “By consolidating these small portfolios into more established funds with broader remits, New Star is seeking to improve performance for investors.
“Investors in these funds should be well served by Ian Beattie and Mark Harris.”
020 7034 2636
Three examples of compensation rule issues
Buying in baskets
Scam victims lost average £91,000
Stepped down following MBO
Helped by rising oil price