'Orphaned' funds are less of a problem in AIC universe

Mistake for investors to assume small size as problematic

clock • 4 min read

There are many trusts offering access to attractive market niches, with strong long-term performance records and engaged boards, argues Sarah Godfrey, investment companies analyst at Edison Group.

A recent article in Investment Week looked at a report by Morningstar into 'orphaned' open-ended funds across Europe, focusing on those with less than €100m of assets and net inflows/outflows of less than €10m over the past five years. The research found that almost 80% of these funds were rated 'negative' or 'neutral', meaning at best they are expected to achieve average performance. The report concluded the open-ended funds industry is launching far too many unwanted funds and, irresponsibly, not closing them. This is arguably less of a problem in the closed-ended funds sector, w...

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