Columbia Threadneedle to close pair of ex-BMO Gam funds

The UK Mid-Cap and Corporate Bond strategies are too small to run without significant charge increases


Columbia Threadneedle is set to close two of the funds it acquired from BMO Gam in 2021, after they were judged to be too small to support their cost structure.

The £6.9m UK Mid-Cap fund will close on 7 November 2022, having shut to new investments last month. Meanwhile, the £11.9m CT Corporate Bond fund will be wound up on 13 December.

After reviewing the strategies, the asset manager deemed an increase in assets under management (AUM) unlikely, which would have resulted in increased operating costs in order to support the funds.

Both funds were highlighted as underperformers in Columbia Threadneedle’s Assessment of Value report in March.

A spokesperson told Portfolio Adviser: “Due to the low assets of these funds, the boards have deemed both funds to be too small to allow them to be run efficiently, resulting in their closure. By acting now, the directors ensure that the fixed costs of closure are spread across a reasonable level of AUM, which is in the best interests of all clients.”

Columbia Threadneedle adopted the funds as part of its acquisition of BMO Gam’s European operations in 2021.

In its latest quarterly results up to 30 September, the CT UK Mid-Cap fund’s performance was down 19% for the year to date. However, this compared favourably to its FTSE mid-250 index benchmark, which fell 27.7% across the same period.

According to Morningstar, the fund reached a peak £103.9m AUM in 2014. However, it has steadily declined since 2018, when its AUM was at £73.4m.

The CT Corporate Bond fund delivered -20.6% in the 12 months to 30 September. The strategy, managed by the EMEA credit team, was launched in 1996. It was previously known as the BMO Corporate Bond fund before adopting the CT moniker following the acquisition.


Latest Stories