FCA concern over illiquid assets and open-ended investment funds
Written by Charlie Palmer on 10/08/2018

On 8 February 2017, the FCA published a discussion paper (DP17/1) considering some of the risks that arise when consumers use open-ended investment funds to gain exposure to illiquid assets I have covered this a fortnight ago, but it might be pertinent to point out that "Illiquid! assets" are not restricted to property funds. It could also include private equity,some smaller companies and markets,some bond funds etc. Also in turbulent market times...many other classes can become temporarily illiquid.

This strengthens the case for listed investment trusts over OEIC funds. Investment trusts do not have to sell assets to provide investor liquidity, because there is generally a market price available for them. The shrewd IFAs and investors ones will actually be buying these at times of crisis for precisely this reason. For those stuck on OICS - use the liquidity warning in the SR templates in your client communications. “This fund may not be open for withdrawals at all times….”

And on the same subject...here is one that is worth looking at ken-baksh-market-report

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