An update on the Scottish Equitable Allium Multi-Asset DRP fund range trade suspensions
On Friday 21 December 2018, we suspended trading in the Scottish Equitable Allium DRP range of funds across our pension and Aegon Retirement Choices (ARC) ranges.
To find out why this happened and how it affected investors, you can view our original update here: https://www.aegon.co.uk/content/ukpaw/news/scottish_equitablealliummulti-assetdrpfundrangetradesuspensions.html
Current status - 6 February 2019
The underlying Allium DRP funds closed on 31 January 2019. While we manage the closure of the Scottish Equitable versions of the funds and the receipt of any assets due from the fund manager, the funds remain suspended. This means withdrawals* from the funds can’t be made at this time and any payments into the funds are currently being re-directed into the Cash fund.
Any payments made into the Cash fund during this time will remain in the Cash fund until we receive a clear and complete instruction to switch any investment into another fund or funds.
* The exception to this is payments made out as a result of:
- Claims on the death of an investor
- An income drawdown arrangement that is already in place.
For investors on Aegon Retirement Choices (ARC)
Where the Scottish Equitable Allium (ARC) funds are used in a model portfolio via ARC, any allocation to these funds was removed during the fund suspension and reassigned to the cash facility.
This will continue where any existing holdings in the Scottish Equitable Allium (ARC) funds are being sold down, including at the next rebalancing point unless we receive alternative instructions.
We recommend that financial advisers and discretionary fund managers review their affected model portfolios as soon as possible.
Has the value of the Scottish Equitable Allium funds been affected?
In the short-term, yes. When the underlying funds closed on the 31 January, the value of the Scottish Equitable Allium funds fell by between 5-7%.
As of Wednesday 6 February 2019, the fund manager has returned approximately 95% of the overall value of the Aegon investment. They’ve told us that the remaining value – roughly 5% - has been withheld while the final assets sales are completed and to cover the cost of managing the closures in a controlled way.
They’ll send the remaining value back to Aegon over the next few weeks, although this may not cover 100% of the original value. Market movements between the date of the original suspension and the date the underlying funds closed also impacted the value of the funds.
Market movements, combined with the amount withheld by the fund manager have resulted in the fund values falling collectively by between 5-7%.
As the funds remain suspended, the value of the remaining investment may change further before the funds reopen.
Where the funds currently invest
All assets held in the Scottish Equitable Allium DRP funds prior to 31 December 2018 now invest directly into the alternative funds, chosen by Aegon, listed below.
However, as the funds remain suspended, investors can’t switch out at this time.
Any payments made into the Scottish Equitable Allium DRP funds after 31 December 2018 are being re-directed into the Cash fund.
Please note you may see the old fund name on your plan details for until the full value is received from the underlying Allium DRP funds.
- Scottish Equitable Allium Multi-Asset DRP III now invests directly into the Cautious Core Portfolio
- Scottish Equitable Allium Multi-Asset DRP V now invests directly into the Balanced Plus Core Portfolio
- Scottish Equitable Allium Multi-Asset DRP VII now invests directly into the Growth Core Portfolio
- Scottish Equitable Allium Multi-Asset DRP VIII now invests directly into the Adventurous Core Portfolio
Source: Aegon UK
We hope to have confirmation of the assets due to Aegon from the fund manager this week and we’ll update current investors once confirmation has been received.
What current investors need to do
If you’re uncertain about how this affects your investments, please speak to a financial adviser in the first instance. If you don’t have a financial adviser you can find one in your area via www.unbiased.co.uk