Plato fund shuts down

An Aussie equities fund from Plato Investment Management is shutting down following a decision from its responsible entity.

The Plato Australian Shares Income Fund (Managed Risk) is set to close. It currently holds about $20 million in funds.

The fund's responsible entity, Pinnacle Funds Services, said the closure comes as the scale fails to match the operating costs.

"Pinnacle Funds Services has reviewed the strategic options available to the fund and concluded that the fund cannot accomplish its investment objectives and strategy as it is unlikely that it will achieve the necessary scale to sustain the costs associated with operating the fund," a letter to shareholders reads.

"Accordingly, the responsible entity has determined that it is in the best interests of the members to wind up the fund."

Investors were given the option of redeeming their units on May 24, switching to other Plato funds, or waiting for the wind up to receive their money.

The closing fund invested in the Plato Australian Shares Income Fund, with an extra overlay of cash and interest rate futures to manage risk, and charged 9bps over the underlying fund's 0.9% p.a. management costs.

The underlying fund is going strong with $1.5 billion in funds under management and has delivered 1% above benchmark's 11.9% p.a. in total returns since its September 2011 inception, as at April 30.

The boutique had $5 billion in funds under management at March end and has grown five-fold since 2014.

It shed $238 million in total FUM between June and December last year.

Read more: Plato Investment ManagementPinnacle Funds ServicesPlato Australian Shares Income Fund Managed Risk
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