New Star Asset Management - Is my money safe or not?

Coume

Hello,

I have 3.5k invested in two New Star funds and I am wondering if I leave them or withdraw them regarding the recent news about their financial health... (ie: http://www.h-l.co.uk/news/Expert-comment/articles/2314?rq=article) I'm only down 17% with my funds but they are winner in the long term IMHO so should I take a hit and withdraw my money as long as I can? Or should I remain invested with them IF my money is 100% safe... I don't mind taking a punt on shares that I personally select but I would not want to lose 3.5k due to New Star going potentially bankrupt?

Any thought will be more than welcome.

Thanks
Ludo

KenC_3

Assuming you are invested in a unit trust your assets are perfectly safe. The Trustees of the unit trusts, RBS, are responsible for ensuring the security of the assets of the trust. This means that all client assets are segregated from teh assets of the company.

Coume

KenC wrote: »

Assuming you are invested in a unit trust your assets are perfectly safe. The Trustees of the unit trusts, RBS, are responsible for ensuring the security of the assets of the trust. This means that all client assets are segregated from teh assets of teh company.

Thanks Ken.

To make it perfectly clear and to make sure I got it 100% right, that would mean that if New Star was going bust, my ISA money in their 2 funds would become managed buy another Asset management company?

KenC_3

Coume wrote: »

Thanks Ken.

To make it perfectly clear and to make sure I got it 100% right, that would mean that if New Star was going bust, my ISA money in their 2 funds would become managed buy another Asset management company?

Management contracts are worth money as they earn the management company an annual income. Therefore, if NSAM is in danger of going bust, it is likely to sell the contracts to a rival company. Do you remember Aberdeen Asset Management a few years ago? They were badly affected by the Split Capital Investment Trust debacle and sold management contracts to NSAM.

If the contracts were not sold by NSAM I'm sure the liquidators would sell them quickly in order to pay any creditors.

In short, I believe the answer to your question is yes.