Asset management firms need to give clear and timely communication that a top-performing fund is reaching its capacity and will soon not accept new money, fund selectors have said.
That was the main finding from a poll by Citywire Selector which canvassed investors on the biggest challenges surrounding the soft closing of funds.
This saw 43% of respondents state that asset managers needed to be clearer when it was apparent that inflows were reaching a level where stemming or closure measures would need to be taken.
This was ahead of 24% of investors who said that the biggest problem they had was asset managers closing a fund meant they were often left with an inferior alternative or, in some cases, skipped the sector entirely as a result of the best performer being shuttered.
Taking 19% of the vote was the view that fund restrictions aren’t imposed until well after a manageable level of assets have already been met. It was seen that imposing measures to ‘safeguard the investment philosophy’ was often done too late.
This is while the remaining 14% of those who responded said firms closed a fund only to launch a similar-styled strategy for the same team shortly after. A move which has previously been viewed as making the original soft closure redundant.
The Citywire Selector poll was conducted in the wake of two leading asset managers – AllianceBernstein and Allianz Global Investors – announcing they were closely monitoring flows into two of their biggest strategies after a strong start to 2017.