Aberdeen Standard Investments is closing the Absolute Return Government Bond fund it acquired from Ignis.
The Ignis Absolute Return Government Bond fund transferred to Standard Life Investments following the firm’s acquisition of Ignis Asset Management in 2014.
The £149m fund has now been closed to further investment and will be wound up on 22 December due to considerable outflows from the mandate, which mean the fees no longer cover the fund’s investment management services. Management fees have now been removed from the fund.
“After careful consideration, the board of directors has taken the decision to terminate the fund, having determined that it cannot continue to be operated in an economically efficient manner,” the firm said in a letter to shareholders. “This is as a result of the significant redemptions since 2014, consequential substantial reduction in size and the potential for continuing redemptions.
“The board of directors believes that the fund can no longer meet its investment objectives and strategy without changes to the maximum leverage permitted under the risk management process. However, such changes could prevent distribution to certain categories of shareholders and therefore prevent further the ability of the fund to be operated in an economically efficient manner.”
Investors have the option of selling out of the fund or waiting for the termination date when holdings will automatically be redeemed. No dilution levy will be applied and the associated fees will be borne by the firm.
The fund is the sole sub fund of the Ignis Global Funds Sicav. As such, the umbrella Sicav will subsequently be liquidated.