View the article online at http://citywire.co.uk/wealth-manager/article/a742639
Dimensional gives forlorn bond fund a global makeover
by Robert St George on Mar 24, 2014 at 14:47
Dimensional has proposed changing the mandate of its £154 million Sterling Ultra Short Fixed Income fund.
Over the past three years the fund has returned 2.9%, compared with an average of 8.4% for the Citywire Sterling Short Term Bonds sector.
Dimensional now plans to switch the fund from being sterling focused to having a global remit, and to remove its 30% cap on non-sterling investments.
The average constituent of Citywire’s Global Short Term Bonds category has returned 5.8% through the past three years. The best performer in that sector has been another Dimensional product, the £2.5 billion Global Short Dated Bond fund, which has delivered 11.2%.
‘The directors believe that it will be in the best interests of shareholders in the fund to allow additional flexibility in the investment policies,’ Dimensional wrote to investors. ‘The purpose of this change is to widen the eligible universe of securities in which the fund can invest.’
The group added: ‘While there is a proposed change to the breadth of the eligible universe, the general investment approach of the Fund will not change.’
The proposals will now be put to a shareholder vote on 24 April 2014; if they are approved, the fund will be renamed as the Global Ultra Short Fixed Income fund.
The costs of implementing the changes, as well as the costs of securing all necessary regulatory and other approvals, will be borne by the fund.
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