Franklin Templeton, Pendal funds shutter

Franklin Templeton has shuttered two of its funds this month, while Pendal will terminate one of its funds in August.

Responsible entity Franklin Templeton Australia Limited (FTAL) has closed both the ClearBridge RARE Emerging Markets Fund and Martin Currie Property Securities Fund on May 15 for their inability to scale.

FTAL said it "determined that it is in the best interests of all unitholders to wind up the fund in an orderly manner and return the proceeds to investors" as it was unlikely that current assets under management (AUM) would grow in the near term.

The ClearBridge RARE Emerging Markets Fund launched on 15 August 2008. It had $7.4 million at the end of April, according to Rainmaker Information.

The fund returned 7.04% p.a. for the past year and 2.46% p.a. over the decade. It aimed to provide investors with exposure to the growth of emerging markets infrastructure securities and to outperform the benchmark, being the S&P Emerging Markets Infrastructure Index.

The Martin Currie Property Securities Fund was incepted on 31 December 1994. It had about $21.2 million at April-end.

Requiring a minimum $25,000 investment, the fund aimed to earn an after-fee return in excess of the S&P/ASX 300 A-REIT Accumulation Index over rolling three-year periods.

Performance wise, it made 9.29% p.a. over the last year and 6.67% p.a. over 10 years.

Separately, the Pendal Asian Share Fund will terminate on August 18 due to its inability to scale.

The fund had $21.8 million at the end of April, according to Rainmaker, returning 8.13% p.a. and 6.75% p.a. over the past year and 10 years respectively.

Incepted on 22 August 1996, the fund aimed to provide a return before fees, costs and taxes that exceeds the MSCI AC Asia ex Japan (Standard) Index (Net Dividends) in AUD over the medium to long term.

It invested in companies operating in countries such as Korea, Hong Kong, Taiwan, Singapore, China, Malaysia, Thailand, Indonesia, the Philippines, India and Vietnam.

After careful consideration, Pendal said "we have determined that terminating the fund is in the best interests of investors."

"The fund's small size means that it has high running costs and cannot be managed in a cost-efficient way," Pendal told investors.

"We also consider that the fund has little prospect of significant growth in funds under management in the foreseeable future. If the fund were to continue, the fund's size would result in higher management costs for investors, which would reduce their investment returns."