IFA raises concern as funds close to new investors

Darius McDermott, managing director of London-based Chelsea Financial Services, said he was worried about the lack of choice for investors after Aberdeen Asset Management announced it would reduce inflows into its £2.7bn Emerging Markets fund and its £6bn offshore Global Emerging Markets fund.

He said: “The Aberdeen Emerging Markets fund has been a firm favourite of our clients since its launch and we support its actions as it is looking after its existing investors. However we are obviously disappointed that new investors will not be able to invest in this fund, particularly as there is a lack of competition for decent alternatives in the sector.

“In the new tax year, investors looking for an alternative fund could consider the First State Global Emerging Markets Leaders fund. While not performing quite as well as the Aberdeen fund, it is nonetheless a first-quartile performer over one, three and five years, returning more than double the sector average in most of these periods.

“My real worry for investors is that First State has also closed some of its emerging markets franchise funds and, if its Leaders fund should also be closed in the future, the remaining funds that are open to new investment in the sector are nowhere near as good right now.”

A statement from Aberdeen said the firm was protecting existing liquidity and investors. It said: “Our preference is to not completely close the funds so as to allow existing small investors in the funds to continue with their regular monthly savings plans. As such we are exploring ways for them to remain open but with flows significantly reduced.”