Abrdn has flagged the poor performance of 10 of its funds, saying it will be closely monitoring these.
In a 16-page value assessment report, which does not cover the fund house’s entire range, Abrdn said although all funds reviewed had an appropriate quality of service and costs, 10 funds had not performed in line with stated objectives.
Four UK-focussed funds appear on the list, including the ASL UK High Income Equity Fund and UK Income Unconstrained Equity Fund.
The report did not mention the potential closure of any of these funds.
The board of directors at Abrdn said they welcome ongoing actions taken by the investment managers, and will continue to closely monitor the funds.
Funds flagged by Abrdn
ASI World Income Equity Fund |
ASI American Income Equity Fund |
ASI American Unconstrained Equity Fund |
ASI Global Focused Equity Fund |
ASI Global Income Equity Fund |
ASI UK Growth Equity Fund |
ASI UK High Alpha Equity Fund |
ASI UK High Income Equity Fund |
ASI UK Income Unconstrained Equity Fund |
ASI Dynamic Distribution Fund |
The group’s UK growth equity fund posted a 10.35 per cent return in 2021, 7.98 percentage points below its index, while the UK High Income Equity Fund saw a 16 per cent return in the same year, 2.3 percentage points below its index category, according to data from Morningstar.
The World Income Equity Fund saw a 10.63 per cent return in 2021, compared with its index at 7.62 percentage points above.
Jamie Matheson, chairperson at Aberdeen Standard Fund Managers, said the report is published to provide “comfort” that the funds are delivering value.
“Where we identify issues, you can be assured that the board is working with Abrdn to rectify them,” he said.
“As we enter the second year of this ongoing assessment, you can be assured that we will pay close attention to funds which have previously highlighted any concerns and will ensure that remedial action is in train or has been taken.”
Why is Abrdn releasing this information?
As part of the Financial Conduct Authority’s asset management review, fund houses are required to carry out an annual assessment of whether the firm provides value for their clients.
The value rules, which have been in effect since the start of 2020, require asset managers to look at their performance, costs, economies of scale, comparable market rates, services and share classes.
The FCA recently warned fund managers it will take action after a review found most value assessments were not meeting FCA standards.
The FCA conducted a review of 18 fund managers of different business models and sizes between July 2020 and May 2021 and found while some had been conducting value assessments well, “too many AFMs often made assumptions that they could not justify to us”, undermining the credibility of their assessments.
sally.hickey@ft.com
