Luxembourg fund range has been overhauled by Aberdeen
Aberdeen Asset Management is finishing an overhaul of its entire Luxembourg fund range, adding three new funds, merging others and taking the total number down from 24 to 20.
One new fund will be the Sovereign High Yield, to be run by Julian Adams. It will absorb a number of existing funds: the High Yield Bond Fund, the US Dollar Bond Fund and the Canadian Dollar Bond Fund. Adams has run a similar fund from Aberdeen's Guernsey base for around two years and the company hopes his track record will sell the product.
Andrew Elder, head of emerging markets, will run the new Frontier Markets fund investing in EMEA equities, which will be effectively seeded by the remains of the $6m Emerging European fund, which was regarded as having too narrow an investment mandate to be viable.
The $3m European managed bond fund is to be added to the $24m European high-yield bond fund, run by Paul Reed. This is despite worries caused by the increase in default rates which, one might suppose, would work against high yield and for a managed style.
'It is a little bit counter intuitive,' admitted Gary Marshall, group sales and marketing director. 'Clearly there have been problems with credit but people are attracted to Europe and new issuance is a still a strong story.'
Another new fund will be created out of two existing European funds, the dollar- denominated European Equity fund (ex-UK) and the euro-denominated European multinational fund (including UK). They are to be merged into a single, pan-European, euro-denominated fund. Despite having a new mandate, it will retain the name of one of the old funds, the European Equity fund, and will be managed by Adrian Fowler.
There are currently two US funds, one small cap, run by Alex Ingham worth $6m and one large cap worth $21m run by Rupert Della-Porta. The smaller will be merged into the larger.
Marshall explained the reasoning. He said: 'We were not seeing enough demand for that fund and our credibility is not good in this area: we have got a good US team, but in the large-cap arena.'
This coincides with Ingham moving to the US to continue analysis of small to mid-cap firms on the ground.
Marshall admits that describing the old funds as 'merging' into the new is not strictly accurate, as the investors have the opportunity to pull out if they wish. However, they are given an easy opportunity to stay with the new products at the start of what Marshall hopes will be a successful restructure.
Commentators have been awaiting some kind of overhaul for some time since Aberdeen bought the Luxembourg range lock, stock and barrel from Aetna in 1998. Despite adding several funds to the range, the company has never got round to a full-scale reshuffle.
'Up to now, we never got our teeth into it,' said Marschall. 'And so there were still some products with limited viability.'
An added tier of asset management can of course deliver additional benefits for certain investors, writes Graham Bentley - just be sure you can justify it to the regulator and, especially, the client
The government is "in daily contact" with industry figures over the pensions dashboard as it prepares for the roll-out and its feasibility report, Guy Opperman has said.
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From 1 April 2019
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