Martin Lee @ Sg
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Schroder Alternative Solutions (AS) Commodity Fund

Due to recent strong growth in the Schroder Alternative Solutions (AS) Commodity Fund, with its assets more than tripling since the start of 2009, it is of the Manager’s view that the fund has reached the limit at which it may not be effectively managed given the current capacity of commodity futures markets.

schroder commodity fundHence, to better manage the fund, Schroder Investment Management has decided to cease accepting subscriptions and switches-in of the Schroder Alternative Solutions (AS) Commodity Fund with effect from 27th February 2010.

This will affect all share classes of the Fund (the “Share Classes”).

The reason for the above closure is that the fund is now managing in excess of 10 billion US dollars across the range of products managed by the team (Commodities, Agriculture and Gold and Metals). This action is necessary to ensure that the Fund’s ability to achieve its performance objectives is not compromised by its size.

I view this move by the fund manager as positive. It is always tempting to allow a fund to grow as big as possible. After all, the manager will earn more in management fees.

However, a fund (depends on fund type also) that is too big might have problems in achieving good returns. Putting a cap on the fund size in order not to compromise the returns for investors speaks well of the manager.

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