Revealed: ASI to shut impact fund embroiled in Boohoo scandal

ASI UK Impact -Employment Opportunities Equity fund loses the backing of its largest investor

Aberdeen Standard Investments will shut its UK impact fund, which was caught up in the Boohoo scandal last summer, Portfolio Adviser has learned.

In a letter to investors seen by Portfolio Adviser, ASI said it would be liquidating the ASI UK Impact -Employment Opportunities Equity fund after it lost the backing of its largest investor.

According to Trustnet, the fund, run by Lesley Duncan (pictured), had just £6.6m in assets at the end of March. It has returned 28.1% since launching three years ago in 2018, over double the IA UK All Companies average of 13.8%.

ASI UK Impact had exposure to Boohoo

While the fund has had a solid run in terms of performance , it took a hit to its reputation last summer after becoming embroiled in the fallout of Boohoo’s slavery scandal.

Portfolio Adviser identified UK Impact as one of a trio of ASI funds with exposure to the fast fashion house, days after an investigation in The Times revealed UK workers were paid as little as £3.50 an hour to make clothes in its Leicester factories.

ASI divested its holding not long after with Duncan condemning Boohoo’s response to the allegations as “inadequate in scope, timeliness and gravity”.

See also: ASI divests from Boohoo with damning assessment of its response to slavery investigation

Commenting on the closure an ASI spokesperson said: “We continually review our fund range and underlying share classes to ensure that our offering meets the requirements of clients and customers as well as our strategic priorities.”

The fund will close its doors officially on 6 July 2021.

Latest fund closure

ASI has been forced to close a number of funds over the past year.

It shuttered its UK Recovery Equity fund after a spell of poor performance which saw it fall 42.5% in the first half of 2020.

Peter Sleep, senior portfolio manager at 7IM, described its performance in 2019 and early 2020 as “disastrous,” because “as a value fund it was loaded up on financials and oil and gas and those sectors had a torrid time”.

“They are all back in favour now but the cavalry has arrived just a little too late,” he added.

Shortly after, ASI announced the termination of the Global High Yield Bond fund in October last year after Scottish Widows yanked around 95% of the funds assets after it handed over its mandate to Lloyds.

Sleep said of the closures: “It is all very well having high conviction funds, but those convictions had better work out at the right time.”

However, ASI have launched a number of new funds including the ASI-CCBI Belt & Road Bond Fund, the Emerging Markets Sustainable and Responsible Investment Equity Fund, the Global Corporate Bond Sustainable and Responsible Investment Fund and the Japanese Equity Fund.

As Sleep commented: “Out with the underperforming, in with the new.”

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