Proposed merger of the abrdn Global Absolute Return Strategies fund

4 August 2023 - abrdn has announced it is seeking to merge the abrdn Global Absolute Return Strategies fund (previously called Standard Life Investments Global Absolute Return Strategies fund) with the abrdn Diversified Income fund.

In a letter to shareholders earlier this week, the company said that it had undertaken a comprehensive review of its fund range ‘with the intention of offering better outcomes to investors.”

Because the abrdn Global Absolute Return Strategies fund has reduced in size over recent years and has not delivered the intended target performance for investors, the company believes that merging the assets into the abrdn Diversified Income fund (which as of 17 August 2023 will be renamed as the abrdn Diversified Growth and Income fund) would be the best outcome for existing investors.

About the abrdn Diversified Income fund

The abrdn Diversified Income fund is managed in a different way but aims to deliver a similar performance target and outcome for investors. It has achieved better performance over both the short and long term after costs.

abrdn also says that the process for the abrdn Diversified Income fund is much more easily understood by clients “given its significantly more straightforward investment approach.” The approach makes investments in traditional assets (equities and bonds) and listed alternative assets (including infrastructure, specialist property and listed private markets). These allocations typically evolve over time according to the development of long-term return opportunities and hence turnover is relatively modest. The approach has minimal use of derivatives or other complex instruments.

Details of the merger timeline

The merger will need to be approved by unit holders of the abrdn Global Absolute Return Strategies fund at an Extraordinary General Meeting (EGM), and unitholders are being invited to cast their vote.

The EGM will be held at 11.15 am (UK time) on 28 September 2023 in 1 George Street, Edinburgh EH2 2LL. Unitholders can cast their vote via post or at the meeting.

Full details can be found on the unitholder letter here.

For the merger to be approved, not less than 75% of the votes validly cast must be in favour.

If investors approve the merger, the abrdn Global Absolute Return Strategies fund will be merged with the newly named abrdn Diversified Growth and Income fund, and this is currently planned for 1 December 2023.

Timeline of key events

Closing date for receipt of Form of Proxy 11.15am, 26 September 2023
EGM 11.15am, 26 September 2023
Publication of the outcome of the EGM

As soon as possible following the EGM via: centre/investor-communications

or 0345 113 6966 (or +44 1268 44 5488 if outside the UK) from 4.00 pm (UK time) on 28 September 2023

Date until which you can redeem or switch your holding to another of our UK funds without redemption or switch charges, or depending on how you hold your investment, transfer to another manager, without incurring rebalancing costs.

If you do switch into another fund or cash in, you should note it will be treated as a disposal of Units for tax purposes and, unless you are invested through an ISA, you may be liable to tax on any gains arising from switching or redemption of your Units. If you are unsure about your personal tax position, please seek professional tax advice.

10 November 2023
Suspension of dealing in abrdn Global Absolute Return Strategies fund Immediately after the 12 noon (UK time) dealing cut off point on 30 November 2023.
Merger takes place 12.01pm, 1 December 2023
Dealing in new shares in the abrdn Diversified Growth and Income fund 9am, 4 December 2023 (deals received immediately after 12 noon (UK time) on 30 November 2023 and prior to this point will be rejected).

VT Chelsea Managed Cautious growth fund as an alternative

Chelsea clients wishing to switch out of the abrdn Global Absolute Return Strategies fund may like to consider the VT Chelsea Cautious Managed fund as an alternative. 

In the most cautious fund of the VT Chelsea Managed fund range, the investment advisers aim to produce growth over the long term, but with lower volatility than equity markets† by
investing in a variety of assets to create a diversified portfolio.

The team carefully selects assets that are less correlated, which means investments that don’t usually rise or fall in tandem – or at least not to the same extent. This reduces the risk that everything in the fund drops dramatically at the same time and helps to smooth returns.

The fund focuses on lower-risk funds that are defensive in nature. These funds' underlying assets may include UK and overseas equities, as well as bonds, property, gold, and other investments.

You can find out more about the VT Chelsea Managed fund range here.

†Long term is 5+ years. The aim is to have lower volatility than global equities over a rolling 5-year period.

Published on 04/08/2023