I’ve just received from EBS the Summit funds annual report 2008 and notice of certain special resolutions to amend the Summit Investment Funds articles of association.
One of the proposals which might be of interest to AAM readers who invest in Summit funds is to amend the level of the Net Assert Value at which the company has the abiity to wind up a fund from £100,000 to €5,000,000 – the rationale being that it is economically unviable to run a fund with a NAV below €5mill.
The Balance Sheet (page 8) of the annual report shows three funds – Stable, Global Leaders and Technology - with NAVs below the €5mill threshold. Presumably passing these articles will allow the compnay to wind up these funds. If this were to happen and you’ve a loss on these funds: (a) you will not be able to participate in any upturn of the fund (which is particularly unfortunate if you are a buy & hold investor with a long duration until your investment horizon), and also (b) due to our tax laws on collective products you will not be able to offset any realized capital loss on your investment against gains elsewhere.
This does not affect me personally as I’m not invested in the funds in question but there is a tendency for certain investors to bin annual reports without reading them in detail. So it may be prudent if you are a Summit investor to read the annual report and the associated circular.
[Disclaimer: Note that the above is coment / observation and is not a recommendation to buy or sell any Summit or other fund or to vote in any particular way on the proposed change to the articles of assocaition.]
One of the proposals which might be of interest to AAM readers who invest in Summit funds is to amend the level of the Net Assert Value at which the company has the abiity to wind up a fund from £100,000 to €5,000,000 – the rationale being that it is economically unviable to run a fund with a NAV below €5mill.
The Balance Sheet (page 8) of the annual report shows three funds – Stable, Global Leaders and Technology - with NAVs below the €5mill threshold. Presumably passing these articles will allow the compnay to wind up these funds. If this were to happen and you’ve a loss on these funds: (a) you will not be able to participate in any upturn of the fund (which is particularly unfortunate if you are a buy & hold investor with a long duration until your investment horizon), and also (b) due to our tax laws on collective products you will not be able to offset any realized capital loss on your investment against gains elsewhere.
This does not affect me personally as I’m not invested in the funds in question but there is a tendency for certain investors to bin annual reports without reading them in detail. So it may be prudent if you are a Summit investor to read the annual report and the associated circular.
[Disclaimer: Note that the above is coment / observation and is not a recommendation to buy or sell any Summit or other fund or to vote in any particular way on the proposed change to the articles of assocaition.]