Rating downgraded

Specialist First State Funds - Downgraded

New launch

Neptune launches China Max Alpha fund

New launch

Neptune Global Long/Short Sector fund

New launch

Legg Mason US Equity Income

New launch

Acuim UK Multi Cap Income Fund

New launch

JO Hambro CM Asia ex Japan

New launch

JO Hambro CM Asia ex Japan Small and Mid Cap

Rating upgraded

Legg Mason Global Credit Absolute Return - Upgraded

New launch

GAM Star Emerging Asia Equity

New launch

MFM Slater Income

Rating downgraded

Fidelity European Opportunities - Downgraded

Rating downgraded

Rensburg UK Blue Chip Growth - Downgraded

New Rating

City Natural Resources High Yield IT - New Rating

New Rating

HSBC American Index - New Rating

Suspended

Legal and General High Income Trust - Rating suspended

New Rating

Muzinich Short Duration High Yield and Enhanced Yield Funds

Rating downgraded

AXA Short Duration High Yield - Downgraded

Rating downgraded

Schroder US Mid Cap - Downgraded

Suspended

Royal London Japan Growth - Rating Suspended

New Rating

First State Indian Subcontinent - New Rating

Rating downgraded

BlackRock European Dynamic - Upgraded

Rating downgraded

BlackRock UK Dynamic - Downgraded

New Rating

Schroder Global Property Income Maximiser - New Rating

Rating downgraded

Artemis European Growth

Rating downgraded

Invesco Perpetual European Equity - Downgraded

Rating downgraded

GAM UK Diversified - Downgraded

Rating downgraded

Investec European - Downgraded

Rating downgraded

Rensburg UK Select Growth - Downgraded

Rating downgraded

Fidelity European - Downgraded

Rating downgraded

Ignis European Income - Downgraded

Rating downgraded

BlackRock UK Dynamic Downgraded

Rating downgraded

Newton Asian Income awarded 4 stars

Rating downgraded

Henderson Asian Dividend Income Downgraded to 3 stars

New Rating

Invesco Perpetual European Equity - Downgraded

Rating downgraded

iShares S&P 500 Downgraded to 3 Star Rating

Rating downgraded

Land Securities - Downgraded

New Rating

Templeton Frontier Markets - New Rating

Rating downgraded

Jupiter Financial Opportunities - Downgraded

Rating upgraded

Fidelity South East Asia - Upgraded

New Rating

IFSL Barclays Defined Returns Autocall Fund - New Rating

New Rating

M&G UK Inflation Linked Corporate Bond - New Rating

Rating downgraded

Specialist First State Funds - Downgraded

First State are soft-closing their Asia Pacific Sustainability, Indian Subcontinent, Latin America and Greater China Growth funds from 1st January 2012 to protect existing investors from performance drag caused by the funds being over capacity. All funds have a natural maximum capacity after which liquidity constraints hamper their ability to act swiftly and make it harder to access smaller stocks.

Soft-closure of the funds means that investors are still able to buy the funds, but the 4% initial charge becomes mandatory and access via fund supermarkets will become more restricted presenting significant barriers to entry.  Although this may inconvenience new potential investors we believe First State have acted appropriately in demonstrating a commitment to look after existing investors over a desire to gather assets.

As a result of the closure, we are automatically downgrading the funds to 2 stars.

Existing investors should not consider this is a sell rating, rather the closure makes it no longer appropriate to have a buy rating in place. The table below indicates the funds that are closing along with suggested replacements. A fifth fund is also being soft closed - the First State Global Emerging Markets Sustainability fund - which is unrated by Bestinvest and is therefore not being downgraded.

 

First State Fund Old Rating Suggested Replacement Star rating

Asia Pacific Sustainability

4 No direct replacement† N/A

Indian Subcontinent

4 Aberdeen Global Indian Equity 3
Latin America 3 iShares MSCI Latin America GBP 3
Greater China Growth 4 Fidelity South East Asia‡ 5

† Given the highly specific sustainability focus of the closing fund, I do not believe there are suitable replacements in this region that fulfill this criterion. Alternative ethical/sustainable funds that are rated by Bestinvest are Kames Ethical Equity, Standard Life UK Ethical, Aberdeen Ethical World, Jupiter Ecology and Standard Life Ethical Corporate Bond.

‡ This is not a like-for-like replacement as the Fidelity South East Asia fund invests in the wider region defined by the MSCI Far East index that includes Indonesia, Korea, Malaysia, Philippines, Singapore and Thailand. However, both managers have a similar style in this region of bottom-up stock picking with a growth bias.

Different funds carry varying levels of risk depending on the geographical region and industry sector in which they invest. You should make yourself aware of these specific risks prior to investing. We aim to provide investors with information to help them make their own investment decisions although this should not be construed as advice or an investment recommendation. If you are unsure about the suitability of an investment or if you need advice on your specific requirements, we strongly suggest that you consider professional financial advice.

The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. Prevailing tax rates and reliefs are dependent on your individual circumstances and are subject to change.