Aberdeen caps inflows into popular EM portfolio
Aberdeen Asset Management is to stem flows into its £9bn emerging market fund range, managed by Devan Kaloo.
The fund group is asking advisers to remove the £2.7bn onshore emerging markets and the £6bn offshore global emerging markets funds from their buy list by April 1.
Both funds have remained firm favourites with the adviser community and Aberdeen says if they were to continue growing at their current pace there would be liquidity issues within some of the holdings.
The firm says it will not compromise the quality of the portfolios’ holdings by investing in stocks of lesser quality.
Aberdeen is keen to avoid a complete closure to allow existing small investors in the funds to continue with their regular monthly savings plans but it is ready to implement other measures, which could include raising fees and closing share classes.
The onshore emerging markets fund is top quartile in the IMA global emerging markets sector and has returned 103.3 per cent over the past three years, compared with a sector average of 78.7 per cent. The global emerging markets fund is also top quartile, returning 102.7 per cent over three years in the same sector. Aberdeen has introduced several measures to stem flows into these funds in the past few years, closing to new segregated business, capping existing segregated accounts and ending proactive marketing of its pooled funds.
Chelsea Financial Services managing director Darius McDermott says: “It is good to see Aberdeen protecting its emerging markets franchise, which runs into billions of pounds. However, it is also disappointing as there are few rivals to Aberdeen’s emerging markets offering aside from First State. It will be interesting to see if they have to introduce further measures to stem the flows.”