We’ve closed the Scottish Equitable M&G American fund08 May 2015
On 7 May 2015, we closed the Scottish Equitable M&G American fund and transferred all current investors into the North American Equity Select Portfolio.
We’ve written to all those affected to tell them about this closure.
Why have we closed this fund?
We constantly review the funds in our range to ensure they continue to meet their long-term objectives.
There are several reasons why we’ve closed this fund: -
- M&G changed the manager of the fund
- The investment focus of the fund has changed significantly from growth to income
- The performance of the fund has been disappointing, as is reflected in its recent downgrade by Morningstar OBSR
Funds that focus on growth tend to invest in companies the fund manager believes are currently undervalued and have the potential to grow in value. Whereas, funds focused on income tend to have a bias towards larger companies that pay regular dividends to investors.
The combination of these factors meant we had less confidence that this fund would continue to meet the needs of our investors, and so we decided to close it.
Why the North American Equity Select Portfolio
We chose this fund as an alternative because it’s similar to the Scottish Equitable M&G American fund in terms of its risk, objectives and what it invests in.
The North American Equity Select Portfolio (PDF - 176kb)(Opens new window) is a multi-manager portfolio. It aims to provide long-term growth by investing in a number of high-quality North American equity funds from different managers, as recommended by independent researchers Morningstar OBSR.
How does this affect investors?
New investors will not be able to invest in the Scottish Equitable M&G American fund and no new contributions from existing investors can be made into the fund.
For existing investors, we automatically transferred their existing investment in the Scottish Equitable M&G American fund, and any future contributions, into the North American Equity Select Portfolio on 7 May 2015. The fund charge reduced from 0.90% to 0.70%. We’ve written to them to tell them and to give them the option to transfer into another fund of their choice if they want to.