Framlington is to close its Managed Distribution fund and liquidate the portfolio from September 30.The 13m portfolio, managed by Richard Peirson, is a fettered fund of funds currently investing in six Framlington unit trusts. Existing investors will be offered a free switch into the Framlington Managed Income fund, managed by George Luckraft. Nick Hodgson, Framlington group sales and marketing director, says: “The main reason for the decision is that we do not believe there is a viable market for fettered funds of funds. Given the growth in popularity of unfettered funds, we don’t believe intermediaries will have the appetite for this type of product in future.” Hodgson adds that the fund has not seen good sales. Unfettered funds of funds invest in portfolios across a range of fund management companies while fettered funds’ managers are constrained to picking funds from their own asset management company. The 112m Managed Income fund is a directly invested unit trust investing predominantly in British convertible securities, bonds, equities and cash. The asset allocation of the two portfolios is significantly different. The Managed Distribution fund had 72% of its assets invested in equities at May 31, while the Managed Income portfolio held only 6% in ordinary shares. The directly invested fund had 61% of its assets in British corporate bonds and loan stocks and 21% in UK convertibles and preference shares. Unitholders not wishing to transfer their investments will be allowed to redeem holdings for cash prior to liquidation. Holdings of Isa and Pep investors will be switched into Framlington’s Gilt fund if no instructions are received. See Fund of Funds Statistics, page 29.