Rebalancing when a fund is hard closed

gterr

Hello,


My ISA portfolio includes 3% (target) of Schroder UK Dynamic Smaller Companis Fund which is hard closed. The fund is 9% down in the last 12 months and a rebalance is necessary. Since I can't buy more units of this fund I'm wondering is I should (a) leave this fund as it is and rebalance by buying more units in another fund in the same sector, or (b) sell the entire fund and rebalance by placing the funds, including the new units, in a new smaller companies fund. Any views?

masonic

It really depends on how much you rate the fund. A smaller companies fund that has grown too large is likely to struggle to exploit opportunities in the market, so that may be a consideration for you.

Linton

The way I play these things is to balance asset types/sectors/geographies/company sizes/etc in parallel. Which particular funds one chooses doesnt matter a great deal, except that for example if one is low say on both small companies and on Latin America then it may make sense to search for a Latin America small company fund were there to be such a thing. Whether you can do this depends on the size of your portfolio. With a small portfolio you could find it difficult to get into this level of detail.

If you are simply trying to find an alternative to the Schroder fund buying something else in addition could well be reasonable. There is not much point in selling the Schroder fund except possibly to simplify your record keeping. Whether that is worth paying extra charges is a decision you would have to make. Another option is to look at whether the Schroder fund is focused in any particular sub sector. For example "small companies" covers a wide range of sizes from say £250M to £1M. Different funds focus on different things so it could be interesting to look for a Small Companies fund that is as different as possible.

ColdIron

I have held onto mine and am using another fund to make up the difference with the original allocation

Borrowedtune

gterr wrote: »

Hello,


My ISA portfolio includes 3% (target) of Schroder UK Dynamic Smaller Companis Fund which is hard closed.

This fund reopened to new money back in October, it was publicised in the investment press at the time.


http://www.investmentweek.co.uk/investment-week/news/2375722/schroders-to-re-open-marriage-s-small-cap-fund

gterr

Borrowedtune wrote: »

This fund reopened to new money back in October, it was publicised in the investment press at the time.


http://www.investmentweek.co.uk/investment-week/news/2375722/schroders-to-re-open-marriage-s-small-cap-fund

Thanks for that. I'd completely missed the news. Problem solved!