AMP Capital may close its $150 million Strategic NZ Shares Fund with investors to be likely offered the option of transferring to the similar NZ Shares Fund.
The $19 billion manager included the revelation in its ‘Other material information’ fund document published, along with a swag of new-age Financial Markets Conduct Act (FMC) disclosures, on the NZ Companies ‘Disclose’ website last week.
Grant Hassell, AMP Capital NZ chief, confirmed the potential closure of the Strategic NZ Shares Fund was on the table as its underlying portfolio now conforms closely with the almost $480 million NZ Shares Fund.
“We’re thinking about it – the two funds are very similar,” Hassell said.
Both funds are managed by Salt Funds Management, which picked up the mandate earlier this year after AMP Capital disbanded its in-house local equities team. However, the Strategic NZ Shares fund is the more expensive option, operating with total annual costs of 1.04 per cent compared to 0.78 per cent for the more strait-laced NZ Shares product.
The AMP disclosure doc says it was possible “the Strategic NZ Shares Fund will be closed and wound up in the near future”.
“However, no final decision has been made or approvals granted for this,” the document says. “If the Strategic NZ Shares Fund is wound up, we may (in our complete discretion) offer investors in the Strategic NZ Shares Fund the option of transferring to another Fund for a reduced buy/sell spread.
“If the Strategic NZ Shares Fund is wound up and that option is not offered, or investors do not choose that option, then Investors’ ability to redeem their Units in the Strategic NZ Shares Fund may be suspended while the Assets of the Strategic NZ Shares Fund are realised and the resulting cash distributed.”
AMP Capital is the eighth manager to file scheme documents on Disclose, which is a requirement for the newly-designated managed investment scheme (MIS) licensees under the FMC.
Hassell said transitioning to the MIS environment was an arduous but worthwhile process.
In a statement he said the move to the new FMC product disclosure statement regime was an improvement on the “highly technical prospectus and investment statements” previously issued for retail investors.
“In practical terms, this means the AMP Capital Investment Funds investment statement will be replaced by six product disclosure statements, each covering funds on a thematic basis,” Hassell said.
“We are pleased with the improved compliance and governance we have put in place following extensive consultation with the Financial Markets Authority and remain committed to providing investors with excellent investment management products and services.”
To date, the Financial Markets Authority (FMA) has granted 12 managers MIS status with around 200 entities expected to make the transition by the December 16 deadline.