How long do funds run for, typically? Zola.

#1
Just looking at various funds online and it struck me just how many funds are new and only been running for a few years.



E.g. HSBC FTSE All World Index - This was only set up on September 2014, why was it not running before, or was it called something else at another time under a different manager? Are they adding this new fund as an option for the popular growth of passive investing?



Do funds like this stay open for the long haul if returning, or do they close regularly?



Just curious as it looks like an interesting fund, but there's not much data to go on with a lot of these newer funds.

#2
Funds may last for decades, though most have run for less time as it is only in the past 10-20 years with the availability of online investing that they have achieved a mass market. Sometimes funds close, this is usually due to take-overs and consolidation amongst the fund managers.



Most index funds are relatively young because it is only recently that index investing has become fashionable - fund managers are always happy to satisfy the market.

#3
That's the bit that makes me wonder.....if a fund that you are invested in start closing down at a certain period, are you then at a risk of losing money when everyone starts cashing out if they do so before you?



Or whats the typical format for that? Does everyone get 'paid out' at once?



I dont understand what happens if it came to the above.

#4
Boring history fact coming up...



The first ever collective investment scheme in the world was called "The Foreign & Colonial Government Trust" and started in 1868.



It was later renamed "Foreign & Colonial Investment Trust" and is still going today.

#6
Remember that a lot of funds moved from bundled to unbundled share classes in 2012. So, whilst the unbundled share class may have a short history, the original bundled share class can go back much further.



Funds are not set up with the plan to shut them down. They tend to close for 3 main reasons

1 - failed to attract sufficient funds to make them viable.

2 - the distributor pulls out and doesn't want to to it any more

3 - mergers through takeovers.






That's the bit that makes me wonder.....if a fund that you are invested in start closing down at a certain period, are you then at a risk of losing money when everyone starts cashing out if they do so before you?


Not on a UT/OEIC. The unit price reflects the assets held and their price.






Or whats the typical format for that? Does everyone get 'paid out' at once?


Planned closures tend to give warning to allow people to tax plan. Mergers really make little difference as the assets are combined. Failures can be messy but then that only tends to happen on niche/specialist funds. Inexperienced investors shouldnt be anywhere near those.

#7



That's the bit that makes me wonder.....if a fund that you are invested in start closing down at a certain period, are you then at a risk of losing money when everyone starts cashing out if they do so before you?



Or whats the typical format for that? Does everyone get 'paid out' at once?



I dont understand what happens if it came to the above.
Originally posted by Zola.


If a fund does poorly then people may start to sell it and as they do the fund will cash in investments to pay for it.



At some point the fund managers may feel the fund has got so small it isn't worth continuing in which case they may sell up the rest of the investments and return the money to you.



Investment Trusts are a bit different as they can trade at a "discount", in other words you may be able to buy £100 worth of shares for £95. That tends to be more likely if they are unpopular. In that case you might actually benefit from the fund closing and distributing the money.

#9



Hi,



interesting fact, any idea what price it was on launch and today's price?
Originally posted by frugalmacdugal


Sorry I don't know, but would be interested if anybody can find the answer. I can tell you they have increased their dividend every year for the last 46 years which is pretty good going when you think of all the stock market ups and downs there have been.



I have investments with them for my son.

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