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Aberdeen to slow flows into emerging markets funds with 2% charge

Aberdeen Asset Management intends to slow flows into its global emerging markets funds by implementing a 2 per cent initial charge.

The initial charge will be applied to the £9.9bn Aberdeen Global Emerging Markets Equity Fund and the £1.7bn Aberdeen Global Emerging Markets Smaller Companies fund from 11 March, while it will go on the £3.7bn Aberdeen Emerging Markets fund from 15 April.

The asset manager has made efforts in the past to slow flows heading into the popular funds but says inflows have started to pick up again recently. It also expects to more money to head towards emerging markets in the future as investor interest remains high.

Aberdeen head of distribution John Brett says adding new stocks to the portfolios just because of money coming into the funds, rather than because they meet their quality standards, would not be in the interests of the funds’ investors.

“Further inflows, if unchecked, will give rise to liquidity issues which may in time result in the investment team being forced to compromise its investment process, resulting in the introduction of lesser quality companies,” he comments.

In addition, the group says it will close its US domiciled mutual and commingled funds.

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