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Fund mergers, closures, and mandate changes are not uncommon

15 January 2024

During 2023 we saw an elevated level of changes being made to some individual investment funds, via mergers, closures and changes in fund investment mandates. We believe that this will continue into 2024, for a varied range of reasons.

The Financial Conduct Authority's (FCA's) Consumer Duty has encouraged many fund managers, amongst others, to look further at the costs, charges, and the economic viability of operating each fund to ensure that they continue to offer value for both the consumer and of course for the fund management company.

Often the reason for a fund merger or closure is simply the smaller size of the fund, rather than its performance or management, with smaller funds being merged with larger funds to provide economic viability for all. In some cases, the funds are not merged with another fund but are sold to cash, which can thereafter be reinvested as appropriate.

In addition, some funds change their existing investment mandate to provide greater scope for investment, and hopefully returns, although these are not guaranteed.

Most managers are required to provide significant notice when closing out a fund position and you may receive a notification directly in the post or through an investment portal. These are not uncommon in current times.

If you have any questions that arise from a fund change which is notified, then please let us know and we would be happy to check that any change continues to fit with the agreed asset allocation of your funds and your attitude to investment risk.

Many of our blog readers will know we recommend that a regular review of your funds, ISAs, investment accounts and pensions with a qualified professional is a great way to ensure that your financial planning remains in order. Please do contact the team at Chapters Financial for your individual needs and requirements.

No individual advice is provided during the course of this blog.

Keith Churchouse FPFS
CFP Chartered FCSI
Chartered Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899

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