Global asset manager Columbia Threadneedle Investments reportedly plans to shut three funds and merge four more into its series of managed funds.
The move is reportedly prompted by the fact that those funds are “no longer economically viable”.
The three funds are called: Threadneedle Navigator Growth and Threadneedle Navigator Income trust. The asset manager is also reportedly shutting the Threadneedle Navigator UK Index Tracker Trust worth £36.7bn.
Investors have the option of either switching their investments to other funds within the asset manager or then to sell their equity.
Trading in those three funds will be suspended on 21 March.
In the event an investor doesn’t take any action, the shares will be redeemed and investors will be refunded.
Threadneedle Columbia Investments reportedly said: “We have considered alternatives to closing the funds, but do not believe that alternative options are appropriate or in the best interests of investors.”
The company has decided to merge the Navigator Funds into the Managed Funds.
A letter written to the company’s shareholders last month said: “Following a review of our fund range, we identified considerable overlap between the Navigator Funds and the Managed Funds.
“By merging the Navigator Funds into the Managed Funds we expect that unitholders will pay lower fees than is currently the case. The mergers will also help to simplify our fund range and reduce the overlap between our products.”
Here is a breakdown of the proposed mergers:
- The Threadneedle Navigator Adventurous Managed Trust merged into the Threadneedle Managed Equity Fund
- Threadneedle Navigator Balanced Managed Trust into the Threadneedle Managed Equity and Bond Fund
- Threadneedle Navigator Cautious Managed Trust into the Threadneedle Managed Bond Focused Fund
- Threadneedle Navigator Growth Managed Trust into the Threadneedle Managed Equity Focused Fund
Despite reassurance from the fund manager that the value of the investments would not change following the move, it warned that the following changes could take place:
- Changes to the dates on which income is paid
- Changes to the way certain fees are applied
- Some differences in the Synthetic Risk and Reward Indicator (SRRI) between the Navigator Funds and the Managed Funds
The asset manager did not respond to a request from Private Banker International for comment.
An extraordinary general meeting where investors can vote for or against the proposal will be held on 14 February 2018.
The transfer will take place on 16 March 2018 if the reform gets at least 75% of votes cast at the EGM.
Columbia Threadneedle Investments manages more than $484bn of AuM across developed and emerging market equities, fixed income asset allocation solutions and alternatives.