Perpetual to shut off small cap fund
PerpetualInvestments is preparing to shut off its Wholesale Small Companies fund in order to protect the performance of the half-billion dollar investment vehicle.
Perpetual Investments group executive Gerard Doherty says the fund, which is available to retail investors through master trusts and wraps, would be closed to all new money from September this year.
According to Doherty, the fund, which manages a total of $540 million, received around $70 million of new money in May alone, taking it to the point where any further inflows could affect performance.
“Our inflows are tenfold what they were a year ago and that is because people have seen good returns and want to be a part of that,” Doherty says.
Doherty says the performance of the fund, which returned 25.5 per cent to investors in the year to the end of May, has benefited from a comparatively positive market environment for smaller companies.
In the 11 months to the end of May, the ASX/S&P Small Ordinaries index outperformed the ASX/S&P 200 by 4.5 per cent.
However, Doherty says some of the potential outperformance in the small companies sector may have been exhausted. “There is less value to be found [in smaller companies] and we need to protect the performance for existing investors,” he says.
The decision by Perpetual to close off the fund mirrors that of other small company fund managers.
Both Investors Mutual and JB Were have previously indicated they would close their respective small companies funds.
AUTHOR
George Liondis
Recommended for you
ASIC has said it is exploring whether there are concerns regarding Macquarie and Equity Trustees for hosting platforms where investors rolled over their superannuation into the Shield Master Fund.
Rhombus Advisory and WT Financial Group are among the AFSLs seeing adviser declines this week, as only three new entrants join the profession.
Strategic technology integration and clearly defined advice propositions are two critical elements for building a successfully scaled advice model, Adviser Ratings unpacks.
National advice licensee PictureWealth has appointed John Bezich in a newly created role of head of advice.
