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BNY Mellon to close absolute return fund after big redemption

BNY Mellon to close absolute return fund after big redemption

BNY Mellon is to close its BNY Mellon Absolute Insight fund following large shareholder redemption. 

The Dublin-domiciled ucits fund is run by Sonja Lami is slated to close on 1 December. 

The fund aims to deliver the cash benchmark 1 month EURIBOR plus 4 to 6%, on a rolling annualised 5 year basis before fees. In doing so, the Fund aims to achieve a positive return over a rolling 12 month period. However, a positive return is not guaranteed and a capital loss may occur.

A BNY Mellon spokesperson said: ‘Following the redemption of a large shareholder, the size of the fund now prevents it from achieving the economies of scale in ongoing operating costs and hinders it from accessing certain opportunities relevant to its investment strategy.’

Currently, the fund has £20 million in asset under management (AUM), however, according to its fact sheet issued at the end of September, the fund had an AUM of €53 million (£48 million), meaning the redemption was likely £28 million. 

The fund targetted a return of between a 4-6% return above its 1 month Euribor cash benchmark. Over the past three years to the end September, it has returned 2% in investors, in a sector where an average of its peers returned 1.8% of the same period.

The firm has notified clients of the closure.

It also stated it will bear the costs of the compulsory redemption and subsequent termination of the sub-fund and that it will not affect shareholders.

The UK-domiciled Absolute Insight fund which as also run by Lami is not affected by the closure.

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