This website is for financial advisers within the UK, Customers looking for Zurich products please go to Zurich.co.uk. Unless you are a financial adviser in the UK who has entered into separate contractual arrangements with Zurich Intermediary Group Limited (“ZIG”) for access to the secure parts of this website, the viewing of this web site is subject to Disclaimers, which, by continuing to access this site, you acknowledge that you have read and accept.

We use cookies to provide you with a responsive service to make your experience of our website(s) better. Please confirm that you agree to our use of cookies in accordance with our cookies policy.

By continuing to use our website we will assume that you are happy to receive non-privacy intrusive cookies. Please be aware that if you disable cookies some functionality on the site will not work.

Alternatively, read our cookies policy to find out more about our cookie use and how to disable cookies.


    • Protect the environment. Think before you print.

Threadneedle Absolute Return fund

24 July 2017

Zurich is removing the Threadneedle Absolute Return fund from the Sterling and Zurich panel propositions

megaphone

As part of our commitment to customers, we regularly review the performance and ongoing suitability of the funds available through our products. We call this ‘funds governance’ and if a fund continues to fall short of these standards, we’ll withdraw it from our fund range.

Our funds governance process has identified that the Threadneedle Absolute Return Bond has failed to meet its own performance targets over an extended period of time. As a result, we’ve decided to withdraw it from our range of panel funds.

Columbia Threadneedle has made the following comment about the performance of the fund:

“The investment objective of the Absolute Return Bond Fund is to achieve a total positive return over a 12 month period in all market conditions. There is a risk to capital, and there is no guarantee that such a return will be achieved within 12 months, or any other timescale.

We fully acknowledge that during 2015 and 2016 the fund produced poor performance and did not meet its overall investment objective. These returns have had knock on impacts to the longer term numbers.

We have taken action to help return the fund in producing positive returns in the future. The key change it to introduce a new primary FM to the strategy from April 2017. Adrian Hilton joined Columbia Threadneedle in June 2016 as a Fixed Income portfolio manager in the Interest Rates & Currencies team. Prior to this, he spent eight years as a portfolio manager at Brevan Howard Asset Management, where he traded Emerging Markets local rates and currencies and at 2008 at the launch of Brevan Howard’s UCITS absolute return rates strategy. Pervious to this Adrian was with Aberdeen Asset Management where he contributed to absolute return rates strategies.

Since his appointment, Adrian has instigated a thorough review of the Absolute Return Bond Fund’s investment process, with the aim of delivering more effective ways to leverage the firm’s strong macro research capability. We believe that combining a thorough analytical approach with a renewed emphasis on relative value opportunities across markets will ensure that the fund achieves its objectives in generating positive returns, regardless of market conditions.”

Funds and Products affected by closure

This affects customers invested in these funds through the following products:

Sterling Investment Bond
Sterling Absolute Return Bond
Sterling Absolute Return Bond 2

Zurich Pension
Zurich Absolute Return Bond ZP

Sterling ISA and Sterling Investment Account
Threadneedle Absolute Return Bond I Acc

How does this affect customers investing in these funds?

Existing customers can remain invested in the funds. If they pay into the funds by direct debit, they can continue to do so. However, we’ll no longer accept increases to direct debits, additional lump sum investments or switches into the funds.

The decision to withdraw these funds for new customers does not necessarily affect their ongoing suitability for existing investors.

How will we communicate this closure?

We have written to you with a list of their clients invested in these funds. We’ll also write to your clients but if any of them contact us, we’ll strongly advise them to contact you for more information.


Download example of customer letter