In a letter to shareholders, the company said the £10m fund will close on February 22 2016, after a proposal to merge it into Aberdeen’s Multi-Asset fund failed to gain shareholder approval in August.
The fund was well-regarded when part of Scottish Widows Investment Partnership (SWIP) under the management of James Clunie, now at Jupiter.
Aberdeen originally wanted to merge away the fund after its takeover of SWIP as it was not “consistent with its processes”.
In a new update to shareholders, the company said: “The fund has experienced steady redemptions over a significant period of time, and we anticipate that this trend will continue.
“The size of the fund is now sub-optimal and our recent proposal to merge the fund into another product did not receive shareholder approval. Aberdeen now believes it is in the best interest of shareholders to redeem all shares and close the fund.”
The portfolio has steadily shrunk from around £50m in size since the departure of Mr Clunie.
This is in spite of the fund producing steady returns, according to FE Analytics, of 15.2 per cent over three years.
Aberdeen said it now expects “increasing levels of cash outflows” from the UK Flexible Strategy fund in advance of the closure, adding: “Any such outflows will be monitored and a dilution adjustment may be charged in accordance with the terms of the fund prospectus to protect remaining shareholders”.