Bestinvest downgrades First State funds

Bestinvest has downgraded four First State funds ahead of their soft closure from the beginning of 2012.

Adrian Lowcock
Adrian Lowcock

The First State Asia Pacific Sustainability, First State Indian Subcontinent, First State Latin America and First State Greater China Growth funds have been downgraded to two stars.

Previously, the First State Asia Pacific Sustainability, First State Indian Subcontinent, and First State Greater China Growth funds had held four-star ratings, while the First State Latin America fund had held a three-star rating.

The company emphasised that the downgrade was not a “sell rating” but says the soft closure meant a buy rating was no longer appropriate.

The announcement follows a similar move by Hargreaves Lansdown, which removed the funds from its Wealth 150 buy-list earlier this week.

The funds will remain available for investment, however, a 4% initial charge will be put into place and access via fund supermarkets will become “more restricted”.

“Although this may inconvenience new potential investors we believe First State have acted appropriately in demonstrating a commitment to look after existing investors over a desire to gather assets,” says Adrian Lowcock, senior investment adviser at Bestinvest.

Lowcock says Bestinvest had a number of suggested replacements for the First State funds.

Bestinvest’s alternative to the First State Indian Subcontinent fund was the Aberdeen Global Indian Equity fund. The First State Latin America fund’s suggested replacement was the iShares MSCI Latin America exchange-traded fund, while the First State Greater China Growth fund’s replacement was the Fidelity South East Asia fund. No alternative to the First State Asia Pacific Sustainability fund was given.

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