First State closes GEM Leaders funds, adds front end charge
First State Investments is to close its First State Global Emerging Market Leaders Funds to new investors in order to protect the interests of existing investors.
The decision follows significant inflows to the funds managed by Jonathan Asante (pictured), head of Global Emerging Markets and Glen Finegan, Portfolio Manager.
Chris Turpin, managing director (EMEA) and Global head of Product at First State explained that over the past couple of years the First State Global Emerging Market Leaders Funds have grown rapidly.
“We monitor capacity on an ongoing basis across all First State investment strategies. We have been monitoring the large and consistent inflows into the Global Emerging Markets Leaders Funds for some time now,” he said.
“Ahead of us encountering any capacity issues that could affect the performance or restrict the team’s ability to invest in certain companies we have made the decision to soft-close our Global Emerging Market Leaders Funds effective 7 September 2013. We continue to believe that our first duty must be to our existing investors and to ensure we manage the scale of funds under our management responsibly.”
From 7 September 2013, First State will impose a 4% front-end charge on the First State Global Emerging Markets Leaders Fund in the UK range. The Global Emerging Markets Leaders Fund in the Irish range will stop accepting further inflows.
Regular savers who maintain the level of their existing contributions in either Fund will not be affected. It is First State’s intention to credit all initial charges to the relevant Fund for the time being.
The frim said the move is consistent with the approach it has taken since 2003 with funds facing similar issues.
In 2003 First State closed the First State Global Emerging and Asia Pacific (All Cap) Funds to new investors. In 2012 First State closed the First State Asia Pacific Sustainability, First State Indian Subcontinent, First State Global Emerging Markets Sustainability, First State Greater China Growth, First State Latin America and First State Greater Hong Kong Growth Funds to new investors.
First State manages more than £114bn across a diverse range of asset classes of which £36.3bn is managed by the First State Stewart team.