With the process due to be completed 30 October, Miton told Portfolio Adviser that the decision to close is a result of the funds no longer being economically viable following consistent underperformance and a bout of investor redemption.
Investment capital will be returned to holders of the funds upon closing if they have not already redeemed shares before then.
While both funds have underperformed their peers in recent years, Global Equity in particular has endured a torrid time, returning 8.5% versus the 28% sector average over a three-year period and shedding 11.2% in the past three months. This underperformance was exacerbated by just shy of £1m in fund outflows during the past year.
However, the American Fund’s underperformance was less pronounced, returning 32.8% over three years against sector average of 46.7%, and also registered a loss of just 1.8% in the three months to 28 September compared to a peer average of -7.6%.
The funds had been outsoureced to Centre Asset Management, which is part-owned by Sanlam Investments, with the American mandates run by Centre AM CIO James Abate and its Global Equity counterpart by Xavier Smith.
In letter to clients, Abate said that he and Smith will continue to be a part of the American Select, Global Select, Active Fixed Income, and Multi-Asset mandates, which are available to UK investors on the Sanlam Asset Management fund platforms.
Furthermore, in addition to the Sanlam Centre Global Select Equity Fund, Centre AM will also take on the running of soon-to-be-launched American Select Equity strategy.
Set to be available to UK investors via the Sanlam Universal Funds platform, the UCITS-qualified American Select Equity focuses on long-term capital growth opportunities within the blue-chip spectrum. It will be available in GBP and USD-denominated class C shares.
The closure follows a difficult year for Miton, with the group yesterday reporting a 76% decrease in profits in the year to 30 June and a series of changes to its fund offering.
