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First State to soft-close £4bn Global Emerging Markets Leaders fund

Asante-Jonathan-2011-700x450.jpg
Jonathan Asante

First State Investments plans to soft-close Jonathan Asante’s £4bn First State Global Emerging Markets Leaders fund owing to the size of the portfolio.

A letter sent to investors explains the full 4 per cent initial charge will be applied to the fund from 7 September to “protect the interests of … existing investors” by discouraging further investment.

The letter says: “The view of the company is that the fund has reached a size which can be managed effectively, but that further significant investment may impact performance.

“This has not been an easy decision for us to take but, despite the impact it will have on the ongoing business of many of our long standing clients, we continue to believe that our first duty must be to our existing investors in ensuring we manage the scale of funds under our management responsibly.”

The company says it will advise investors of “any further action” it may consider taking to its broader range of funds, which are also growing in size.

First State has closed a number of funds in the past when they grew too large, starting with the First State Global Emerging and Asia Pacific (All Cap) funds in 2003.

In 2012, it closed the First State Asia Pacific Sustainability, First State Indian Subcontinent, First State Global Emerging Markets Sustainability, First State Greater China Growth, First State Latin America and First State Greater Hong Kong Growth funds.

Chelsea Financial Services managing director Darius McDermott says: “This move was well signalled by First State. We are always supportive when managers close funds due to capacity as it protects those who have supported the funds previously.

“It is however a real shame, following a similar move by Aberdeen, that investors will soon not be able to buy the two leading emerging markets franchises.”

First State Global Emerging Markets Leaders’ cumulative performance to 10 May 2013

 
Fund 4.50% 11.62% 21.38% 44.40% 85.83%
3.15% 11.77% 16.64% 14.75% 23.42%
1.31% -0.14% 4.07% 25.84% 50.57%
  22 / 70 34 / 69 14 / 64 4 / 48 3 / 35
2 2 1 1 1

Source: FE Analytics

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