BMO GAM set to close absolute return fund as assets plummet
'No longer commercially viable'
BMO Global Asset Management (BMO GAM) has confirmed it is closing the BMO Global Equity Market Neutral fund following redemptions after a period of underperformance.
In a statement, BMO GAM said: "We have been in active communication with investors in the fund following the recent redemptions we have seen.
"While the fund remains able to meet its liquidity obligations, we believe it is no longer commercially viable and, acting in the best interest of investors, are in the process of preparing an application to the Financial Conduct Authority to close the fund."
In February, Investment Week reported that funds in the UT Targeted Absolute Return sector had shed £14.7bn in assets under management over the 12 months to 28 January 2020.
Targeted AR funds haemorrhage assets despite solid returns
Data gathered by Investment Week from FE fundinfo at the time showed that the BMO Global Equity Market Neutral fund was £612.4m in size a year ago.
According to the March 2020 fund factsheet, the fund has shrunk to £10.6m in size.
Global Equity Market Neutral reported losses of 30.1% in the calendar year 2019, dragging its total losses down to 25% over three years to 31 December.
Equity market rally drives BMO Global Equity Market Neutral 2019 performance collapse
But in January this year, BMO GAM stated that the fund "remains viable and fully invested".
The stated aim of Global Equity Market Neutral was to deliver a positive absolute return on an annualised basis over a three-year period regardless of market conditions by investing in derivatives on customised baskets of global equity securities.
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