Aegon has announced it will be shutting a small mirror version of the Merian Monthly Income fund months after lead manager Lloyd Harris and his team jumped ship for Premier Miton.
In an update posted to its website the investment firm and life insurer said Aegon Merian Monthly Income Bond had struggled to grow assets and would be shuttered early next year. It will instead shift investors into a more expensive product managed by Janus Henderson.
At the end of July, the Aegon Merian Monthly Income Bond fund had total assets of just £0.19m, according to Trustnet.
The fund features in its Aegon One Retirement fund range and is an offshoot of the £35.0m Merian Monthly Income Bond fund.
“We constantly monitor and refine our fund ranges,” the group said. “The Aegon Merian Monthly Income Bond fund (AOR) fund hasn’t grown in size as we’d expected, so we’ve decided to close the fund.”
Merian Monthly Income Bond had been run by Harris (pictured) and his team, including Simon Prior and Rob James. But in June they were replaced by Jupiter managers Harry Richards and Adam Darling ahead of the FTSE 250 fund group’s acquisition of Merian. The Jupiter pair also took over the Merian team’s £439.25m Corporate Bond and $393.75m Merian Financial Contingent Capital funds.
Harris and his team meanwhile defected to Premier Miton and have since launched two funds, including the Strategic Monthly Income Bond fund, which will follow the same approach they used at Merian.
Aegon Merian Monthly Income Bond will officially close its doors on 21 January 2020.
When the fund closes existing investors will be automatically transferred into the Scottish Equitable Janus Henderson Strategic Bond fund which Aegon said was the most comparable fund in its range.
Both funds aim to beat the IA Sterling Strategic Bond sector over any five-year period by investing in a global portfolio of bonds, including high yield, corporate and government debt. However Aegon noted the fund has higher charges than the underlying Janus Henderson fund and “will therefore be less likely to meet this target”.
Aegon Merian Monthly Income Bond has outperformed both the Scottish Equitable Janus Henderson Strategic Bond fund and PN Sterling Strategic Bond sector on a five year view, returning 32.4% versus the latter’s 24.5% and 21.9%.
Following the move charges on Scottish Equitable Janus Henderson Strategic Bond will drop from 0.65% to 0.59%.
