While Aberdeen has stopped marketing the fund and asked IFAs to take it off their buy-lists, investors can still access it directly or through platforms and are not faced with an unrealistic minimum investment or inflated initial charge.
Usually when a fund announces a soft-closure, the fund group either rapidly increases the minimum investment – such as with Sebastian Lyon’s Trojan fund – or chooses to increase the initial charge – as with Angus Tulloch’s First State Asia Sustainability fund.
Aberdeen, which voiced concerns about the capacity of its £3.4bn fund back in February this year, hasn’t ruled out the possibility of closing the fund outright, but at the moment it is still possible for retail investors to add it to their portfolio.
Performance of fund vs sector and benchmark over 10-yrs
Source: FE Analytics
Aberdeen Emerging Markets is the best-performing fund in the IMA Global Emerging Markets sector over 10 years, with returns of 477.81 per cent. It is also a top-five performer over three and five years, with returns of 50.81 per cent and 77.41 per cent respectively.
A number of FE Trustnet readers have expressed regret at missing out on the fund following Aberdeen’s announcement of a soft-closure, but as things stand, they can still access the sector-leading portfolio, which is headed up by Devan Kaloo’s London-based emerging markets team.
"I think the word 'soft-closure' is often used to scare people off, when very often very little changes – particularly for existing investors," said Kerry Nelson (pictured), managing director of Nexus IFA.
"Aberdeen clearly wants to deter people away from the fund, but I’d definitely encourage those to buy the fund when they can – particularly those who want to add a little bit of spice to their pension fund, as this is an excellent long-term holding." A recent FE Trustnet study revealed that Aberdeen Emerging Markets is the most-held fund among multi-managers.
As with all Aberdeen portfolios, the team puts an emphasis on capital preservation. Each company goes through a stringent screening process, with balance sheets and reliability of earnings heavily scrutinised in particular, before it can be considered for inclusion.
Kaloo is currently overweight Brazil and India, and underweight China, preferring to access the region via Hong Kong and Singapore-domiciled companies, which in general have better corporate governance and are less volatile.