FCA warns of asset manager failings on closet trackers and soft closed funds

In a thematic review of 23 funds titled 'Meeting investors' expectations', the FCA found that although most UK funds were operated in line with investors' expectations, three so-called 'closet trackers' did not clearly indicate the investment strategy was constrained, with limited freedom in relation to a benchmark. It also found two other funds had material passive holdings that were not adequately disclosed. The regulator also notes documents for one fund used jargon that a retail investor would be unlikely to understand. The review also looked at four funds which were not active...