The Prudential Global Emerging Markets Portfolio Fund will manage capacity issues by using open GEM funds within a 'fund of funds' arrangement. This will facilitate both new investment and further investments from existing clients, while at the same time.
(PRWEB UK) 14 April 2014
Set up as a 'fund of funds', the Prudential Global Emerging Markets Portfolio Fund will be managed by Prudential's Portfolio Management Group (PMG) with Morningstar OBSR acting as investment advisers.
It will provide access to leading Global Emerging Market (GEM) funds selected by Morningstar OBSR and will be blended to give access to a mix of different investment styles and sizes of company.
At launch, the Prudential Global Emerging Market Portfolio Fund will comprise of five underlying funds. The existing Aberdeen Emerging Markets and First State Global Emerging Markets Leaders Funds, and their 4,000 investors, will be rolled into the new Portfolio Fund and those single funds will be closed to new business.
Investors in the Prudential Global Emerging Markets Portfolio Fund will also have access to the M&G Global Emerging Markets, Fidelity Emerging Markets and JP Morgan Emerging Markets Income Funds.
The launch of the new Portfolio Fund provides a timely solution to the growing trend in the market, particularly in the global emerging market sector, for a number of players to control and manage capacity in their funds. They limit flows of new monies usually by introducing an initial charge – and this is often referred to as 'soft closure'.
The 'soft closure' measures can protect the interest of existing investors who have supported the funds for a number of years, and protect and maintain the past performance record of funds. But they can also send out the signal that these funds are closed for new business – new investors are discouraged from investing in the fund because of the initial charge and additional work can be created for advisers in having to assess alternative funds for their clients.
Andy Brown, Investment Director at Prudential’s Portfolio Management Group, said: "The Prudential Global Emerging Markets Portfolio Fund will manage capacity issues by using open GEM funds within a 'fund of funds' arrangement. This will facilitate both new investment and further investments from existing clients, while at the same time continuing to provide investors with some access to 'soft-closed' funds through our existing fund holdings."
The Prudential Global Emerging Market Portfolio Fund will be available both to existing investors and for new business in the Prudential Investment Plan and Flexible Retirement Plan. It will also be available to existing investors in Prudential’s Flexible Investment Plan and Flexible Lifetime Annuity.
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