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First State U-turn on global equity fund closure

by Chris Sloley, Robert St George on Jan 23, 2014 at 14:26

First State U-turn on global equity fund closure

First State is set to reassign and refocus its global equity fund after having previously announced plans to close the strategy.

In a notice to investors, the investment firm said it would be reallocating management of the First State Global Opportunities team to its Singapore-based team.

It had previously been overseen by Habib Subjally and First State set out plans to close the strategy when news of Subjally's departure first came to light.

This was followed by Subjally officially leaving the firm along with his 10-strong London team, who all opted to join RBC Wealth Management earlier this month.

Under the proposed change, First State Stewart, which also manages the firm’s Asia Pacific and global emerging market equity funds, will be responsible for the global equity fund.

First State also intends to rebrand the fund as the First State Worldwide Leaders fund.

‘As a result of the review, First State UK has taken the decision to migrate management of all its global equity funds to one team, the First State Stewart team,’ the note said.

‘Given the global equity team and First State Stewart team are two distinct teams…it will be necessary to change the investment policy of the fund to permit the fund to focus on investment equity securities of larger capitalisation companies worldwide and allow broader exposure to equity securities of companies in the emerging market countries.’

Under the changes, more than 30% of the fund will be able to be invested in emerging market equities, which, First State said, would increase the risk profile of the fund.

Further to this, the fund’s approach to the Chinese market will also be altered. It can currently invest up to 25% directly in the China B Shares market but it will also be allowed to invest indirectly in the China A-Shares market, which covers mainland Chinese securities.

The proposed changed, which is still subject to a shareholder vote, is set to come into effect on February 24 2014.

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