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Hargreaves Lansdown in exit alert for AAM investors

Hargreaves Lansdown is recommending Aberdeen Asset Management investors to sell their holdings in most of the firm&#39s remaining funds following the sale of six major unit trusts to New Star.

In a move which comes as another blow for Aberdeen&#39s retail business, HL is advising investors to switch out of funds, including UK growth, UK mid cap, European growth, UK blue chip and North American.

HL remains a firm supporter of four funds sold to New Star this month but says the only remaining AAM funds that investors should hold are Aberdeen Far East and Asia Pacific, which it believes are in safe hands under manager Hugh Young.

But HL also warns investors that switching out of Aberdeen&#39s progressive growth fund, which invested in split-capital trusts, could jeopardise their chances of getting a rescue payout.

The IFA firm believes that, with investor sentiment at a low, and with Aberdeen facing mounting criticism over the split-cap debacle, investors should switch to funds which are more likely to attract further investment.

Head of research Mark Dampier says: “Trying to perform with negative cashflow is a real killer and I just do not see any money going into most of Aberdeen&#39s funds.

“All companies are suffering but, with the ongoing splits&#39 crisis, investors should switch elsewhere.”

Aberdeen managing director Gary Marshall says: “The remaining funds have never been huge retail funds. Any redemptions should be absorbed to a certain extent by inflows from our institutional clients, which are staying with us.”

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