Suspended funds

Due to increased market volatility and uncertainty, some property funds have been suspended.

Of the funds Nationwide has distributed, the suspended funds are:

  • M&G Feeder of Property Portfolio Fund, suspended 4 December 2019
  • Aegon Property Income Feeder Fund (Kames Property Income Fund), suspended 12 noon on 16 March 2020

This means they have stopped accepting further investment into and Switching from/withdrawals out of the funds for the time being.

Income will still be paid.

Reinstated funds

Of the funds Nationwide has distributed, the following funds have been reinstated after an initial suspension:

  • The L&G UK Property Fund was suspended 12 noon on 17 March 2020. The suspension was lifted 12 noon on 13 October 2020.
  • The Standard Life Investments UK Real Estate Fund was suspended 12 noon on 17 March 2020. The suspension was lifted 12 noon on 16 November 2020.
  • Janus Henderson UK Property PAIF was suspended 12 noon on 16 March 2020. The suspension was lifted 12 noon on 24 February 2021.

Reasons for suspensions

Increased market volatility and uncertainty has created an environment in which investors have become more nervous about investing in the UK commercial property market and valuations of underlying properties has been more difficult.

Unlike investing in equities, investing in commercial property is less liquid as transactions take a long time to complete. Equally, the fund managers want to ensure they get the best deal possible for their investors and do not want to participate in a ‘fire sale’ whereby they sell properties below their fair value in order to meet redemptions.

In December 2019 the M&G feeder of Property Portfolio fund was unable to meet the demands of withdrawals and suspended. More funds were suspended in March 2020 because they were unable to value the properties within the funds due to the Coronavirus (COVID-19) pandemic.

Fund managers do all they can to avoid suspending trading in their fund, but unusual and exceptional circumstances can mean this happens at times. The suspension allows for an orderly valuation and sale of properties to help ensure that the strong attributes of the portfolio in terms of its mix of properties and quality tenant base are not compromised while the cash buffer can be increased ahead of re-opening the fund.

Your investment portfolio should be considered over the medium to long term. If you don’t need to make withdrawals then no action is required. But should you need to, contact your financial adviser to check all your options. Please, bear in mind that no withdrawals can be currently taken from these funds.

A proportion of your portfolio could be invested in these funds

This could be the case if you are a Nationwide Model Portfolio customer. Dependent on your level of trading through the Aegon Customer Dashboard (opens in a new window) and attitude to risk, it should be a small proportion of your overall investment portfolio, which could also include:

  • Bonds: uk and overseas
  • Shares

If you hold these funds or are in the process of a transaction which involves them, Aegon will contact you regarding this as soon as possible. Aegon will also notify you when the fund suspensions are lifted.


There is no maximum time limit on the suspension

There is no maximum time limit on how long a fund can be suspended. The fund groups are not able to say how long they expect their respective suspensions to last. They are monitoring the situation very closely and this is formally reviewed every 28 days (from the date of suspension).


The funds will continue to be actively managed

The funds will continue to be actively managed by the fund managers who will also continue to report on any investment activity as normal. For example M&G confirmed that "in recognition of customers' temporary inability to access their investment", they will be waiving 30% of its annual charge, which will end when the fund resumes dealing. This will be different between funds at various times, so please check the individual fund websites for more information.

Independent valuations of property assets are taking place

Since the suspension, this has moved from a monthly to weekly basis. The fund managers will continue to report on any investment activity.


Restrictions on investments and withdrawals

These funds are currently not accepting:

  • further investments
  • switching from or to funds
  • withdrawals.

Units from the property funds cannot be sold whilst suspended.

Deals placed after the suspensions will not be accepted and will be applied to the appropriate product cash facility. You can arrange for investment of these monies into any open fund via your Aegon Customer Dashboard (opens in a new window) – or get in contact with your Financial Advisor if you feel you need advice.

Please remember, any withdrawals from your total investment will not be taken from the property fund. They’ll be taken from the other funds. So, as the amount invested in your property will remain the same, the percentage that your property fund occupies in your portfolio will increase.

If you have initiated a transaction which involves the above funds, and Aegon cannot process the transaction, they will contact you and inform you of your options.

Regular payments

Any regular premiums/payments which don’t involve the above funds will be processed as normal.

If your payment is due to the above funds during the period of the suspension Aegon may need to change your Direct Debit instruction to pay the amount originally instructed to enter the above funds into the appropriate product cash facility.

Aegon will contact you if this situation occurs and give you information on options for your regular payment moving forward.

You may see information on the fund websites referring to Direct Debits being cancelled. Please be assured that this only refers to customers directly trading with the fund itself, and the proportion of your Direct Debit set up through Nationwide/Aegon will enter the appropriate product cash facility as above.

Transferring from a Stocks and Shares ISA

If your ISA is from previous years' contributions i.e. you haven’t put any money in to it this year, then any money that is not invested in a suspended fund can be moved in the normal way. Your current provider will simply retain the money in the suspended fund as a Stocks & Shares ISA until the suspension lifts. The current provider should explain your options for the remaining money but will aim to complete your request to move it as soon as they can.

For any ISA contributions in the current year, the whole Stocks and Shares ISA has to be moved together, so as the suspended part cannot be moved at present the whole of this year’s contributions will need to stay where they are until the suspension lifts.

You can still withdraw monies from funds which don’t involve suspended funds, but please be aware that a standard withdrawal/redemption from an ISA will lose its ISA status unless transferred to another ISA product. Please see above information on full and partial withdrawals.

Important: The value of your investment can go down as well as up so you may get back less than you originally invested.

Note:

This is not intended to promote or provide a recommendation in relation to our investment service. Any comments made are intended to provide general information only. If you would like any further information, please contact a Nationwide Financial Adviser.


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