Rathbones has converted its multi-asset range into Ucits products due to concerns they would otherwise be classed as ‘complex products’ under forthcoming Mifid II rules.
The range has shifted from a Non-Ucits Retail Scheme (Nurs) structure to Ucits as of today (May 3).
Vehicles being converted include the Enhanced Growth, Strategic Growth and Total Return funds. These are managed by head of multi-asset David Coombs, assisted by Will McIntosh-Whyte.
Rathbone Unit Trust Management chief executive Mike Webb said Mifid II rules, which will class certain portfolios as ‘complex’, were a “key element” of the move.
Mifid II proposals – set to come into force in January 2018 – will mean all non-Ucits funds’ retail investors must complete appropriateness tests before investing.
Providers believe this will deter investors from using the funds, but advisers have expressed concern that changing products’ structure will have a negative impact on their investment flexibility.
However, Mr Webb said: “We know that complex products would face marketing restrictions and our multi-asset funds were not using [leverage] so it made little difference.”
The changes follow Schroders’ decision to convert two of its own products to a Ucits structure, though the fund house declined to comment on motives behind the move.
In March, Investment Adviser reported industry trade bodies had once again lobbied the European Commission to overhaul the definition.
However, the European Securities and Markets Agency (Esma) has subsequently proposed a tightening rather than an easing of the proposals.
Esma told the commission last month that some more complicated Ucits structures, such as synthetic exchange-traded funds, should also be captured by the regulations.
Mr Webb said the launch of the firm’s Luxembourg-based Sicav feeder funds on May 17 was another factor in Rathbones’ decision.
The feeder funds will invest into the three multi-asset portfolios as well as Bryn Jones’ Ethical Bond fund, a process which the chief executive said was easier to undertake via Ucits structures.
