Just over a year after its launch, Schroders has decided to wind up its Schroder Geared Global Active Value Fund (hedged).
The decision was made because there has been very little demand for the product in the current market environment, Schroders head of product and marketing Stephen Kwa said.
“We only had a handful of external investors totalling a couple of hundred thousand dollars, so we’re not in the business of keeping products open for which there is very little market demand,” Kwa said.
Investors will be returned their money by 31 July 2009.
“We spoke with our distribution partners and they also confirmed that demand for geared products will remain weak in the foreseeable future,” Kwa said.
“But on the other hand we’ve been seeing a lot of success in the ungeared version of our product, so people have actually been getting back into our ungeared funds and they have grown quite significantly.”
The Schroder Geared Global Active Value Fund (hedged) used leverage to buy into the firm’s ungeared global active value strategy, which had over $5 billion in funds under management worldwide at the end of May 2009.
The ungeared global active strategy had $180 million in Australia at the end of June 2009.
“The concept of an internally-geared managed fund is still sound because it provides investors with cheaper wholesale rates of funding, and there are no margin calls so your risk of loss is limited to your initial investment and nothing more,” Kwa said.
