Schroders is to convert its £1.1bn Managed Balanced fund into a Ucits product, in the first sign that Mifid II may be having an impact on mixed asset portfolio structures.
Johanna Kyrklund’s fund will be converted from its current structure as a non-Ucits retail scheme (Nurs) on December 1, Schroders said in a letter to unitholders.
The vast majority of the UK’s multi-manager and multi-asset funds are currently structured as Nurs because of the greater investment powers offered by the schemes.
However, Schroders’ head of UK intermediary Robin Stoakley said in the letter that the conversion would result in no changes to Managed Balanced’s investment objective or policy, adding: “The way it is managed will not change.”
The fund house did not link the change to the introduction of Europe’s Mifid II proposals, due to come into force on January 3, 2017. But other asset managers have expressed concern over plans to label Nurs products as “complex”, meaning they would only able to be sold to execution-only investors who have completed appropriateness tests.
Last month the Investment Association said it was seeking to work with the FCA to mitigate the work involved in such tests.
The trade body said: “[If the proposals go ahead], the association will seek to discuss with the FCA how it can design an appropriateness regime that is aligned to the actual consumer risk involved”.
Over five years the Schroders fund has delivered a 32.4 per cent return, compared to 31 per cent from the Investment Association Mixed Investment 40% - 85% Shares sector, according to FE Analytics.
Over three years the portfolio has returned 21.4 per cent, the same amount achieved by its peer group.
