New Star has merged its £8m equity-only UK Growth fund of funds into the balanced £152.7m Fund of Fu...
New Star has merged its £8m equity-only UK Growth fund of funds into the balanced £152.7m Fund of Funds Portfolio.
Head of investment management at the group Mark Harris said this was a purely commercial decision, as the UK Growth fund was not taking in money and had been £8m for five or six years.
While UK Growth has pure equity fund exposure, the fund of funds portfolio has 50% in UK equities, 15% in fixed interest and the rest spread across international equities.
Harris said: "Investors were sent a letter and given the opportunity to reallocate their investments but the fund of funds portfolio was the default option.
"The performance of the UK Growth portfolio was credible, but if funds do not grow to a certain size, they are expensive to run and end up having to make more risky investments."
Other groups have had to merge away smaller sector specific funds of funds this year, with Insight Investment rationalising its Emerging Markets fund of funds into its Asian portfolio, for example.