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Rivals slam EFM over ratchet fund &#39confusion&#39

Edinburgh Fund Managers is being criticised for sending out confusing marketing literature which it now admits is “too generic”.

Rival fund managers say EMF is claiming its international funds are not ratchet funds because ratchet funds are “expensive” but it still offers ratchet funds in the UK.

EMF recently sent out marketing literature called Clearing the Confusion to defend itself against attacks on itsglobal protected fund range from rival fund managers.

The information includes a section on ratchet funds. It says: “Fiction: The funds achieve their monthly protection lock- up through a ratchet mechanism which is very expensive.

“Fact: The Edinburgh global protected funds are not ratchet funds but cash and call funds. Ratchet protection is expensive which is precisely why Edinburgh Fund Managers does not employ it.”

But EMF then appears to contradict itself by saying its Safety First fund, which is sold in the UK, can be defined asa ratchet fund.

Head of marketing Marianne Cantley says: “One definition of ratchet funds is funds which completely restructure their option position every time the prices change. Our Safety First fund is a ratchet fund by this definition.

“I would not stand by the fact that ratchet funds are expensive as I have a problem with the term &#39ratchet fund&#39.I do not know what is meantby ratchet fund.

“The comments about ratchet funds in the Clearing up the Confusion literature were too generic. The comment needs a definition ofthe term ratchet.”

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